Currently, we are in a mixed market, which means that we have a combination of a seller’s market, a balanced market, and a buyer’s market.
As a refresher, a seller’s market means the demand for homes is high but the supply is low, favoring sellers in the market. A balanced market means there’s a roughly equal amount of homes available and buyers to purchase them. A buyer’s market means there are plenty of homes available to sell, but fewer buyers, which skews the market in the buyer’s favor.
For the homes in the market that are listed between $100,000 and $350,000, there is currently a 2.6-month supply of inventory, which is the lowest that we have seen since before the market crash in 2006. This means that if no more homes came on the market, we would be completely out of homes to sell in less than three months.
Moving up the range between $350,000 and $400,000, the market moves up to a six-month supply of inventory. This is more of a balanced market.
Between $400,000 and $450,000, there are seven months’ worth of homes on the market, which is a condition that favors buyers.
For the first and third brackets, the average days on market (how long it takes for homes to sell) are 101 and 58 days, respectively.
When looking at the market, you also need to consider interest rates. In 2018, we have seen unprecedented interest rate increases. This year alone, there have been more increases in interest rates than in the past 46 years.
We all know that interest rates sank very low after the market crashed. Since then, we’ve been in recovery mode. Currently, the interest rates for a conventional and FHA loan are between 4.75% and 5.625%. For a VA loan, the interest rates are at 4.5% to 5.5%. USDA loans have interest rates that are somewhere between 4.7% and 5.5%.
What do these increases mean? It means that buyers have a little less spending power, so you may need to decrease the amount of home that you’re looking to buy, or maybe make sacrifices in others areas, such as paying more per month for your mortgage.
Our prediction for the market for the middle to the end of the year is that we expect to see a more continued balanced market. Buyer activity will lessen and the interest rates will continue to rise, providing more inventory to choose from for those buyers who remain.
If you’re in the market to sell your home and you’re interested in finding out what your home’s value is, or if you’re interested in purchasing a home before rates go up too much more, please don’t hesitate to reach out to us. We would love to be able to help you with that process, and it comes at no cost to you. We hope to hear from you soon.