The U.S. housing market has become increasingly unaffordable for many individuals looking to become homeowners. However, according to a recent report from Redfin, there is still hope for those who want to buy a home soon.
Redfin highlights two key factors in the housing market that could present an opportunity: rising inventory and volatility in mortgage rates. Since the beginning of September, new listings have increased by 2%, indicating that more homeowners are putting their properties on the market.
Although the rise in inventory is modest, it is a positive sign for prospective buyers. Chen Zhao, the economic research lead at Redfin, believes that the situation may even improve slightly over time. Additionally, Zhao notes that people will gradually become more accustomed to the high mortgage rates.
Even a slow increase in the housing supply can be beneficial for buyers. Despite the challenges of the current market, there is reason to remain optimistic about the possibility of finding an affordable home.
Mortgage Rates Fluctuate Amid Fed Speculations
Rates in the mortgage market are experiencing significant fluctuations as investors anxiously await the decision of the U.S. Federal Reserve regarding a potential interest rate hike. The upcoming policy meeting, scheduled from Oct. 31 to Nov. 1, has triggered uncertainty and market upheaval.
Reacting to speeches from Fed officials and geopolitical tensions between Israel and Gaza, mortgage rates saw a notable pullback last week, dropping approximately 20 basis points. Mortgage News Daily reports that the 30-year mortgage rate dipped from 7.81% on Oct. 6 to 7.6% as of Oct. 11. This slight volatility in rates presents an opportunity for attentive buyers to enter the housing market.
However, buyers still face numerous challenges. Attom, a real-estate data analytics company, reveals that 99% of counties in the United States were less affordable in the third quarter than their historical average. Moreover, the pace of home price increases in major cities has surpassed wage growth.
While a substantial decline in home prices is unlikely, there is reason for cautious optimism. Given the current interest rate environment, it is improbable for prices to sharply rise.
