This year’s spring selling season is shaping up to be the best for American homebuyers in five years, Nick Gerli, CEO of the real estate data platform Reventure App, told Newsweek.
Despite climbing home prices, mortgage rates have recently reported weeks of declines and inventory is growing in many parts of the country, alleviating the shortage of homes and forcing sellers to slash prices to attract still-cautious buyers.
Why It Matters
Spring is normally the busiest time of the year for the U.S. housing market, when the highest number of properties hit the market and milder temperatures make it easier for buyers to view their potential dream homes and shop around.
But skyrocketing home prices and stubbornly high mortgage rates in the past few years have squeezed many buyers to the sidelines of the market, raising concerns that this year will see a nationwide drop in sales even during the spring homebuying season.
What To Know
Despite growing inventory and widespread price reductions, home prices are still rising in most of the country.
That is mainly because the U.S. still has a chronic lack of supply compared to pent-up demand: according to a recent report by Realtor.com, it will take more than seven years to fix the existing gap if the country continues building at the current rate of construction.
In February, according to Redfin’s latest data, the median sale price of a typical U.S. home was $424,647, up 3 percent compared to a year earlier.
The number of homes for sale on the U.S. market, however, is slowly growing: last month, there were a total of 1,638,368 homes for sale across the country, up 11.8 percent from February 2024. At the same time, the number of newly listed homes was 483,692, down 3.3 percent year-over-year.
While aspiring homebuyers now have more homes to choose from, they are still struggling to afford their very high price tags. This mismatch is pushing many sellers to reduce their asking prices and meet buyers where they are at: 18 percent of homes on the market in February had their initial asking price reduced by sellers, according to Redfin.
By comparison, only 24.7 percent of properties sold above list price, down 1.4 percent compared to a year earlier.
On top of this, the situation has slightly improved for both buyers and sellers when it comes to mortgage rates. Freddie Mac reported on Thursday that, as of March 20, the 30-year fixed-rate had stayed under the 7 percent mark for nine consecutive weeks, and is now at 6.67 percent.
While mortgage rates are expected to stay between 6 percent and 7 percent throughout 2025 and 2026, even a slight drop can boost buyers’ purchasing power and encourage homeowners holding on to lower monthly payments to put their properties on the market.
What People Are Saying
Gerli told Newsweek that he expects softening price growth in the spring due to low buyer demand and a big surge in listings.
“Inventory is up almost 30 percent year-over-year nationally,” he said. “Price cuts are at the highest rate in seven to eight years. Sellers seem intent on moving inventory and are beginning to accommodate buyers,” he added.
According to Gerli, these conditions will pave the way for this spring to be “the best time to be a buyer in the [U.S.] housing market since the pandemic started in 2020.”
Listings, price cuts, and days on market are all moving in buyer’s favor,” the real estate analyst explained.
“However—prices are still near record highs nationally,” he added. “So it will still feel expensive to buy a home. As a result, homebuyer demand is likely to remain subdued until rates or prices come down meaningfully.”
Heather Mahmood-Corley, a Redfin Premier agent in Phoenix, said in a recent statement: “Overall, it feels more like a buyer’s market than a seller’s market. I’m telling sellers their home needs to look like a model house, and it probably needs to be priced lower than they think. Even though costs are high, it’s not a bad time to buy: For listings that sit on the market a long time, many buyers are able to successfully negotiate.”
Realtor.com senior economist Joel Berner said in a statement: “Many prospective homebuyers have been biding their time, saving up money as rents have declined for 19 consecutive months, waiting for rates to fall. Though that has not occurred in a significant way, other market conditions like growing inventory, falling median listing price, and increased price reductions are setting the stage for more home purchase activity during this spring busy season.”
What’s Next
There is still a lot of uncertainty over the future of the U.S. economy, which has a 40 percent chance of entering a recession this year, according to Goldman Sachs’ estimates.
An economic downturn could slow down the already “comatose,” U.S. housing market, experts told Newsweek, eroding buyers’ confidence and purchasing power.
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