The week spanning October 1-7, 2023, stands out as the most advantageous period for homebuyers this year. This week presents a unique blend of market conditions that lean in favor of buyers compared to other times of the year.
Understanding the 2023 Housing Market Dynamics: The 2023 homebuying season largely followed conventional seasonal patterns. However, persistent challenges related to affordability and inventory have led to significant regional variations in the market. During this period, the active listing inventory began to decline compared to the previous year's surge, as homeowners opted to remain inactive. Historical data suggests that the first week of October could feature up to 17% more active listings than the beginning of the year. For buyers, this translates to potential savings exceeding $15,000 compared to the summer peak, given a median home price of $445,000.
While purchasing post-peak might offer additional savings, buying earlier typically means a broader selection of fresh listings. Therefore, buyers should weigh their priorities when determining the ideal time to shop.
A Look Back at 2022 and the Shifts in 2023: In 2022, elevated home prices and rising mortgage rates resulted in fewer homeowners listing their properties. By July 2023, the number of homes available for sale decreased compared to previous years, as existing homeowners hesitated to exchange their current mortgage rates for higher ones. Despite the limited inventory, homes in many markets remained available for longer durations than in recent years. This trend suggests that buyers might find sellers more amenable to negotiations compared to the intense pandemic market. Although mortgage rates remain high, causing higher monthly payments for median-priced homes than the previous year, the relentless price escalation has paused. Notably, the median US home price witnessed a 0.9% decline year-over-year in June and July. Rental prices also decreased year-over-year, providing a respite for both buyers and renters.
Why the First Week of October? The week of October 1-7 is historically favorable for buyers due to a combination of high inventory, prices below peak levels, diminishing demand, and a slower market pace. This period's reduced activity is influenced by school schedules and climatic conditions. The housing market typically becomes active in spring, peaking in summer, as families aim to relocate during school vacations. As autumn approaches and families prioritize school schedules, demand decreases, leading to reduced prices. Early autumn offers buyers the opportunity to choose from a diverse range of options at more affordable prices.
Inventory and Buyer Competition: During the optimal week, buyers can anticipate an increase in listings compared to earlier in the year. Historically, inventory peaks in early fall. However, 2023 might witness lower inventory levels due to sellers' reluctance. Despite this, the seasonal inventory trend is expected to persist. The first week of October might see active listings rise to levels observed between 2021 and 2022 for the same period, although it may not reach pre-pandemic levels.
Buyers during this week can also expect reduced competition. Properties usually attract maximum viewership in spring, with the trend continuing into summer. However, 2022 experienced a shift due to high mortgage rates causing a decline in buyer interest from late spring. Despite this, 2023 seems to be following pre-pandemic patterns. Although there's less buyer demand than during the pandemic, listings this year still attract more attention than pre-pandemic times. Historically, during the best week to buy, demand is 18.7% lower than the peak.
In conclusion, while the housing market in 2023 presents challenges, the first week of October offers a silver lining for prospective buyers. With a combination of favorable conditions, this period stands out as the best time to make a purchase.
Want to take advantage of this window of opportunity?
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