As spring traditionally marks the start of the real estate season, many buyers are holding off until summer in hopes of a return to normal inventory levels, competition, and prices. However, is the housing market actually heading toward normalization? Experts in the industry are seeing promising signs. Here's what they shared with GOBankingRates.
Higher Interest Rates May Reduce Home Prices
Although historically low interest rates are no longer available, there's still some good news. Real estate consultant Ivan Lobo from Made in CA advises buyers that higher interest rates may lead to a decrease in home prices.
"Interest rates have risen, but they're still historically low. However, a continued increase in rates could slow home sales and potentially even cause a slight dip in home prices," Lobo says.
A Return to Somewhat Normalcy
Despite rising interest rates, Lobo predicts that home prices will not increase at the rate seen before. "Based on current trends and projections, housing prices are expected to continue to increase at a slightly slower pace."
Rena Kliot, the founder of Pulse International Realty, agrees that the market won't be as volatile as it was during the pandemic. "Bidding wars have decreased, buyers have negotiating power again, and even though mortgage rates skyrocketed, they seem to be returning to a familiar, more palatable place."
Anticipate More Properties on the Market
Summer is a popular time to sell, resulting in a surge of houses on the market. However, this summer may see an even higher number of listings due to the rise in interest rates, causing more homeowners to sell.
"More inventory will become available as a result of the increased rates for anyone who stretched themselves thin without a fixed rate in place," Kliot says.
Anything Goes in Hot Markets
If you're looking to purchase in a competitive real estate market, some of the aforementioned trends may not apply. According to Lobo, Austin, Nashville, and Denver are currently among the most competitive markets in the United States.
"Since these markets can be very competitive, they usually come with a higher price tag compared to other cities on average," Lobo says. As a result, waiting until summer in these markets may lead to paying more than you would now.
Given this information, the best thing you can do when purchasing a home this summer or anytime is to gather as much information as possible. "I recommend conducting thorough research and obtaining preapproval for a mortgage (loan)," Lobo says.
Additionally, it's important to find a real estate professional with whom you feel comfortable and can trust. "My advice for anyone looking to buy a house this year is to work with a real estate expert who will negotiate on your behalf and has in-depth market knowledge," Kliot says.
If you're ready to take the leap and purchase a home, Frontgate Real Estate is here to help. With our streamlined and personalized approach, our team of experts can guide you through the process every step of the way.