There are multiple advantages for homebuyers to explore this summer, experts say.
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If you've been waiting for the housing market to present the right conditions to buy, this summer may be worth a closer look. Mortgage interest rates have dropped slightly from their spring levels, and buyers may find other advantages as well.
According to Zillow, the average 30-year rate has come down from 6.62% on May 21 to 6.37% this week. That's still higher than the sub-6% rates buyers were seeing as recently as April 21. After a spring of rate swings driven by the war with Iran and stubborn inflation, negotiations between the U.S. and Iran have eased some of the uncertainty that increased rates, though they remain above 6%.
Spring is traditionally the best season to buy a home. But this year, summer may bring buyers a few advantages of its own, even if rates aren't declining as fast as many had hoped. We asked real estate and mortgage experts what buyers may be able to take advantage of this summer. Below, we'll highlight three specific advantages they noted for homebuyers this summer.
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3 advantages homebuyers should know this summer, according to experts
While the advantages of homebuying this summer will vary based on the buyer, the experts we spoke with specifically highlighted these three timely advantages worth knowing now:
Today's market could result in less competition
As we head into summer, one of the biggest benefits buyers may enjoy is that they're substantially outnumbered by sellers. According to Redfin, "the U.S. is in one of the strongest buyer's markets on record," with 47% more sellers than buyers, a level close to the highest on record.
With fewer buyers competing for homes, bidding wars may be less common this summer. You may not have to waive an inspection just to compete, and you'll likely have more time to think before making an offer than buyers did in recent years.
This summer, there are simply more homes on the market than buyers to purchase them. "From a financing perspective, buyers have an advantage right now as inventory levels are higher, properties are staying on the market longer, and demand is softer due to the high mortgage rates," says Melissa Cohn, regional vice president of William Raveis Mortgage.
Where you'll find the least competition may depend on the type of home and your local market conditions. "The best place for a buyer to have little to no competition is in the condo and townhouse market," says Kate Swensen, a real estate agent with HomeSmart in Denver, Colorado. "Those tend to sit much longer on the market."
Competition for homes may vary by location, however. "For homes, it's very neighborhood-dependent," says Swensen. For example, one of Swensen's recent listings in an in-demand area received 20 showings on its opening weekend.
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Buyers may have negotiating leverage
With a buyer's market comes more leverage to get a better deal. Increasingly, sellers are willing to come down on price or offer concessions to sell their home.
"Buyers are getting things for under asking prices and are able to get more concessions to help buy down the interest rate, or are using this concession to have a lower dollar amount for closing costs," Swensen says. "During the inspection process, if there is a 30-item list, the seller is now completing 80% or more of the list, which is extremely beneficial to the buyer."
Indeed, you may find real savings through seller concessions this summer. As Cohn explains, "some of the concessions are meaningful and have covered almost all closing costs, saving the buyer thousands of dollars." She's also seeing some buyers take advantage of seller-paid temporary rate buydowns, which lower your monthly payment in the early years of the loan.
Unless a home is in a highly desirable area where you face more buyer competition, you may be able to ask the seller to cover closing costs, pay for a rate buydown or handle repairs.
List prices are falling
Another advantage homebuyers may enjoy right now is falling prices. The median list price fell 2.4% year over year in May, according to Realtor.com, the steepest drop in the company's data going back to 2017.
"When asking prices and price reductions fall together, that tells us sellers have a better handle on the market and what buyers are willing to pay than they did last year," says Jake Krimmel, a senior economist at Realtor.com. "Sellers are reading current conditions and setting a realistic number up front, instead of listing high, watching the home sit, and slashing later."
Still, some sellers must drop prices to get the deal done. "In the $525,000 to $600,000 price point for Denver metro, I'm seeing an average $10,000 price drop before they can sell it. It's such an advantage to buyers because that's what people want: a lower price and more concessions," Swensen says.
The bottom line
This summer, homebuyers may be able to take advantage of less competition, more negotiating leverage and falling list prices. If you've been waiting for market conditions to improve before seriously shopping for a home, this may finally be the right time to look for savings, even if mortgage rates haven't returned to below 6%.
If you find the right home at the right price, consider negotiating for a better deal. Run the numbers on any home with and without a seller concession, and make sure you can comfortably afford the monthly payment before signing.
While the market hasn't rebounded completely, it's moving in the right direction if you're ready to start house hunting. "Many local housing markets are beginning to look healthier when it comes to both activity and affordability," Krimmel says.
Edited by Matt Richardson
