Lumber Market News More homes for sale and lower mortgage rates bring new hope to buyers End Uses
Posted on July 15, 2024
Redfin reported Friday that a U.S. homebuyer with a monthly budget of $3,000 could purchase a $447,750 home with a mortgage rate of 6.85%, the daily average as of July 11, according to its latest data.
Mortgage rates fell to their lowest level since March in Thursday's inflation report, and the supply of homes for sale is also increasing, creating a prime opportunity for buyers before competition heats up, Redfin said. Last Thursday's rate adjustment means buyers have gained $22,500 in purchasing power since April, when mortgage rates hit a five-month high and a $425,500 home could be purchased with an average interest rate of 7.5%.
Redfin also notes that rising inventory is encouraging for buyers. New listings of homes for sale are up 7% year over year, and the total number of homes for sale is nearing its highest level since late 2020. Additionally, Redfin notes that with the increased number of homes for sale and many of the listings getting older, many of the less attractive homes on the market are having a hard time finding buyers. This gives homebuyers in some areas the chance to get a home for less than the asking price and negotiate other savings, like assistance with home repairs and closing costs.
Commenting on the report, Daryl Fairweather, chief economist at Redfin, said:
“For serious home hunters, now is a good time to close a deal on a home, at least compared to recent times. The combination of lower mortgage rates, increasing supply, and much of the inventory aging creates an opportunity for buyers to have more purchasing power and more homes to choose from than they had earlier this year. But how long this opportunity will last is unclear. Lower interest rates should bring many homebuyers back into the market soon, meaning more competition and home prices will rise even more sharply than they are now. Interest rates may fall even further in 2025, which would further reduce monthly costs and increase competition. One thing is certain: lower interest rates will lead to more home sales.”
FEA collects Wood Markets News from a variety of third-party sources to provide readers with the latest news affecting forest products markets. The opinions and views expressed in these articles do not necessarily reflect those of FEA.
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