A new report from Zillow suggested that the U.S. housing market might take a turn this fall in favor of potential homebuyers.
The real-estate marketplace company released insights Thursday suggesting that more might be cooling down this fall than just the weather.
While seasonal cooldowns are the norm around this time of year, Zillow’s senior economist, Jeff Tucker, noted that price drops have been happening faster than usual. Approximately 9.2% of U.S. home listings observed a price reduction in the week ending on September 16. For comparison, 7.9% of listings had a price cut within the same period in 2019, which was considered high at the time.
Not only does this accelerated drop in prices mean that homebuyers might now hold more negotiating power in sales, but it also suggests that further price cuts might be seen later through winter.
Despite an ongoing drought in housing inventory, August saw an unusual month-over-month increase in new listings, which likely helped bring on these early fall price cuts.
With this in mind, Tucker urged potential homebuyers to strike while the iron is hot.
“There are more motivated sellers and more active listings overall than any time since last December, improving buyers’ chance to find the right fit,” he wrote.
Nonetheless, mortgage challenges remain and are likely to persist.
Freddie Mac put the average 30-year mortgage rate at 7.57% as of October 13, marking several consecutive weeks of historical highs not seen in the past two decades, as previously covered by The Dallas Express.
Soaring interest rates, which many Federal Reserve officials plan to bump up once more before 2023 ends, had driven the typical monthly mortgage repayment to $1,896 as of August, marking an 18% increase from the previous year.
Moreover, there has been a three-year increase of 122% in the monthly principal and interest needed to buy a home.
In Fort Worth, the shifting tides foretold by Tucker could be seen in August, as reported by The Dallas Express. A sharp increase in the city’s housing inventory resulted in lower home prices that month.
The median home listing price in Fort Worth was $352,000, marking a 5.1% decrease from the year prior, according to housing data from Realtor.com. Meanwhile, the median home price was about $338,000, showing a more than 4.3% decrease year over year.
While the real estate market in Dallas also saw a cooldown, it was much more subtle. The city continues to grapple with a significant housing shortage, as previously reported by The Dallas Express. Its difficult-to-navigate and delay-prone development process has exacerbated this, with long permit cycles creating frustration among developers in the building community.