Despite Interest Rates Now Could Be The Time To Buy

As the housing market barrels toward the end of the year and all of its holiday trimmings, potential homebuyers are likely wondering what’s in store for the coming season.

Home shoppers looking for lower asking prices can officially check that off their wish list. November’s median home list price of $416,000 was much more wallet-friendly than June’s record high of $449,000, according to a recent report from Realtor.com®.

Yet the volatile real estate landscape is not quite ready to bring only glad tidings. High mortgage rates—which, as of Wednesday, hovering at 6.58% for a 30-year fixed-rate loan—are a stark reminder that many buyers might still struggle on the affordability front.

“Even though prices are down month to month, they’re still up by double digits from a year ago,” says Danielle Hale, chief economist of Realtor.com.  “And with mortgage rates also up, buying a home is more expensive than last year.”

This deadly combo of high home prices and interest rates adds up to the fact that median mortgage payments are now about $900 higher each month than they were just one year earlier.

So, while all is not merry and bright in the world of real estate, there are inroads for intrepid buyers.

Inventory is soaring, but is that good news?

After the COVID-19 pandemic-fueled homebuying rush reduced the number of homes for sale to all-time lows, the inventory of housing has since rebounded. There were 46.8% more homes for sale in November compared with the same month in 2021.

That translates to a whopping 240,000 more homes for sale on any given day in November. Yet that massive increase in listings hides an important caveat: Fresh listings are down 17.2% on a year-over-year basis.

Put simply, many potential home sellers have decided to stay put rather than list. Many are locked into mortgages with extremely low rates that they’re reluctant to give up, and cash-strapped buyers simply aren’t making offers like they did even just a few months ago.

The result? Homes are simply sitting—and sitting—on the market, ballooning the total number of homes for sale.

“We’ll see fewer newly listed homes hitting the market now through the end of the year and possibly into early next year,” predicts Hale.