Looking to buy or sell a home? Read on to see what the real estate market might have in store next month.
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If you’ve been struggling to buy a home in 2023, you’re no doubt in good company. The combination of expensive home prices and higher mortgage rates is enough to send any buyer running.
It’s also been a tough time to sell a home, namely because anyone selling will then inevitably become a buyer — and have to deal with an expensive mortgage. And so no matter which camp you fall into, it’s important to know what to expect from the housing market in the near term. Here are a few predictions for September.
1. Mortgage rates will remain high
Mortgage lenders don’t seem to be lowering their rates. And given that there’s not a lot of housing inventory to go around, they’re not particularly motivated to do so.
But that puts buyers in a tough spot. Even those with excellent credit might get stuck with a higher mortgage rate, and that can be frustrating and expensive.
The good news is that mortgage rates have the potential to drop in time. So if you buy a home in the near term, there’s always the possibility of being able to refinance to a lower mortgage rate down the line.
But that may not happen for a number of years. So if you’re going to buy a home, it’s important to make sure you can afford your mortgage payments based on what they look like initially. If you can only afford $1,200 monthly mortgage payments, don’t sign up for $1,500 payments in the hope of seeing those come down.
2. Home prices will remain high
In July, the median existing home sales price rose 1.9% from a year prior to $406,700, according to the National Association of Realtors (NAR). This doesn’t mean home prices will continue to rise this year. But buyers also shouldn’t anticipate a large drop in listing prices, either.
Of course, if you’re looking to sell a home, it may be a good time from a competition (or lack thereof) standpoint — more on that in a minute. But you’ll still have to deal with the process of finding a replacement home and having to sign a mortgage at what’s likely to be a higher rate than what you’re paying now.
3. Housing inventory might rise — but only slightly
Housing inventory increased 3.7% in July compared to June, according to the NAR. And if that pattern continues, we could see a further uptick in inventory come September.
But any increase in real estate inventory that arrives in September is likely to be modest. And there probably won’t be enough inventory to meet buyer demand in full. If you’re looking for a home, you might still struggle to find one that checks off all the right boxes. However, if you’re looking to sell, you might continue to benefit from a lack of competition.
If you’re trying to buy a home, know that prices may be high in September while inventory may not be as robust as you want. This doesn’t mean you have to put your plans on hold, but you may need to narrow down your wish-list as far as home features go. Meanwhile, if you’re trying to sell a home, September could be a good time — as long as you understand the challenges that are likely to ensue once you’re forced to become a buyer yourself.
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