By Emily Pandise and Christine Romans -
NBC News
Mortgage rates are high and housing inventory is tight, but some experts believe the housing market has begun to thaw this spring.
Home purchases began to pick up during and after the holidays.
Sales of existing homes increased 3.1% from December to January, according to the National Association of Realtors (NAR).
Meanwhile, the inventory of unsold existing homes
rose 2% from December to January
, totaling about 1 million at the end of last month, slightly expanding buyers' options.
"While home sales are still considerably below where they were a couple of years ago, January's monthly increase is the start of increased supply and demand," NAR Chief Economist Lawrence Yun said in a statement. a press release on Thursday.
A house for sale in Irvine, California, on November 15, 2023.Getty Images
"These could be the market's first steps toward a 'new normal': a world where inventory is still pretty tight by pre-pandemic standards, but buyers aren't exactly jostling each other's doorsteps. sale as in 2021 and early 2022," said Jef Tucker, senior economist at Zillow, in a message posted online.
"A broader supply should help meet the demand that is returning, and remove the risk of a new overheating [of the real estate market]," he explained.
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In recent years, limited housing inventory and low interest rates had frozen the housing market.
Many homeowners who would otherwise be eager to sell have hesitated to free themselves from so-called golden handcuffs that represent
mortgage interest rates as low as 2% or 3%
.
According to experts, this is beginning to change, although interest rates are now much higher and have once again exceeded 7% in recent weeks.
"Markets are recalibrating to the reality that the Federal Reserve is not going to lower interest rates immediately," said Greg McBride, chief financial analyst at Bankrate.
Many buyers and sellers are beginning to accept that "we're not going to go back to 3% and 4% mortgage rates" anytime soon, he said.
In many cases, lifestyle factors - such as people without children at home who want to downsize or expanding families looking for more space - are prompting people to change homes, rather than wait for that more advantageous offers arrive.
"It's a new real estate cycle
," said Bess Freedman, CEO of Brown Harris Stevens, a real estate brokerage operating up and down the East Coast.
According to Stevens, this change in mentality has already begun to generate "good opportunities."
"People who are serious about it are entering the market and taking advantage of it."
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Experts expect buyers to carry a little more weight this year compared to last.
Zillow data shows that one in five homes for sale suffered a price reduction in January, and that the typical home was on the market for 29 days, longer than during last year's buying frenzy but 19 days less than the average. prior to the pandemic.
"We'll probably see several years of fairly tepid house price appreciation," McBride said.
Tucker gave a similar forecast.
"House prices won't skyrocket or plummet, but expect them to move on a slow, boring trajectory as they have historically, and be a bit higher in the spring than in the winter," he wrote.
That could benefit those still looking and saving for a first home, McBride said.
"If you get that promotion [at your job], pay off your student loan debt, and save up, you're going to be in a position where housing prices may not be much different two years from now than they are today." But
your financial situation will be much
better," he said.
Buyers should take the time now to improve their credit and get pre-approved for a loan.
Freedman also warned against waiting for prices to drop if you can afford to buy.
If you happen to find something you love, he said, "you can probably negotiate well, get financing, and you won't regret it."
With supply increasing, buyers may benefit from a little more time in the process than in previous years, when countless buyers forgo inspections and bid well above asking prices.
At these times, "you can do your due diligence. You don't have to feel pressured to make an offer on the spot, and if you do, that's a good indicator that maybe you should walk away," McBride said.
"Making the most important financial decision of your life under duress rarely leads to success."
Sellers may increasingly find they
need the help of a real estate agent
knowledgeable about local trends to keep their homes from sitting on the market too long, Freedman said.
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"If the price is right, [you will be able to sell because] it is undoubtedly a seller's market. If your price is too high, [your home] will remain stagnant," he commented.
If a home you're trying to sell doesn't find a buyer, but its asking price can't be reduced, McBride recommends making other concessions.
"Offering a temporary reduction in mortgage interest could be the kind of incentive that gets a deal done," he said.