Low mortgage rates, declining home prices, and homes that are lingering on the market longer are three main reasons why the next three months could be the best time to buy so far this year, says Jonathan Smoke, realtor.com®’s chief economist.
“The spring and summer home-buying seasons were especially tough on potential buyers this year with increasing prices and limited supply,” Smoke says. “Buyers who are open to a fall or winter purchase should find some relief with lower prices and less competition from other buyers.”
Read more: 5 Top Motivators for Buying Now
The biggest challenge buyers will likely face buying in the next three months is the limited number of choices. There are fewer homes for-sale this fall than last year and housing inventory has already peaked for 2015, Smoke says.
In many markets, real estate is making its seasonal transition and is tilting in favor of home buyers lately.
Also, buyers are locking in low mortgage rates as the Federal Reserve continues to delay raising rates. For the past 10 weeks, the 30-year fixed-rate mortgage has averaged below 4 percent, according to Freddie Mac.
Here are some more factors pointing to a slowdown in the overall housing market:
- Median home prices dropped 1 percent month-over-month in August (however, prices are still up 6 percent year-over-year).
- Homes are staying on the market longer: The median age of home inventory is 80 days, up nearly 7 percent from August.
- Mortgage applications dropped 6.7 percent week-to-week.
Source: “Mortgage Rates: Three Reasons to Buy in the Next Three Months,” Nerdwallet (Oct. 2, 2015)