Prices are easing somewhat. For the second month in a row, the median price of an existing home dropped. It reached $253,500 in August, after reaching a record high of $263,300 in June, according to the latest data from the National Association of REALTORS®.
“Median sales prices typically decline a bit heading into the fall,” says Danielle Hale, realtor.com®’s chief economist. “Summer is a big time for home purchases so that families settle in before school starts in the fall. In the fall, the types of homes that sell are smaller for people without kids. So they tend to be less expensive.”
Existing homes are proving to be a bargain compared to newer homes. The median price of a new home reached $313,700 in July, which is 23.7 percent higher than an existing home.
Home buyers may find attractive mortgage rates this fall. Mortgage rates are still under the 4 percent psychological threshold, which can be a luring incentive for borrowers. Freddie Mac reported last week that the 30-year fixed rate averaged 3.78 percent, holding steady at a 2017 low.
Studies have shown that fall can be the best time to buy. A study conducted by RealtyTrac in 2015 found that October was the best month for home buyers. Purchasers in October paid 2.6 percent below the estimated market value at the time for their home, according to the analysis. In other words, buyers interested in a $300,000 home tend to see a $7,800 discount on it in the fall. Oct. 8 was found to have the best day for bargains too, with an average of 10.8 percent below estimated market value, according to the study.
Home sales in August started to decline heading into the fall season. Sales of existing homes fell 1.7 percent from July to August, but NAR mostly blamed the decrease on the limited number of listings for sale on the market.
Properties are staying on the market for less time, so buyers will need to be ready to act fast. Fifty-one percent of homes sold in August were on the market for less than a month, according to NAR. Properties typically stayed on the market for just 30 days in August.
Source: “Why It’s a Better Time for Buyers on a Budget to Purchase a Home,” realtor.com® (Sept. 20, 2017)