Home Prices Fall and Listings Soar: Could It Be a Great Time To Buy Despite High Mortgage Rates?
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More homes for sale and fewer buyers are helping to empower the few home shoppers out there, who can now hold out for a bargain. And sellers are caving: About 19.6% of all homes for sale were forced to reduce their asking prices to attract buyers in November. And while there likely won’t be an end-of-year buying bonanza, a few intrepid buyers might just score some deals.
“What does all this mean if you are looking to buy a home?” asks Aguirre. “That you’ll have all the leverage for negotiating with sellers. More sellers are willing to pay a portion of the buyer’s closing costs or pay money toward buying down their interest rate. Sellers are dropping prices an average of 3% off the list price—that’s $15,000 on a $500,000 home.”
And in addition to straight-out cash savings, Aguirre finds sellers are willing to make repairs and accept offers contingent on buyers selling their current home. And perhaps most importantly, sellers “no longer ask the buyer to make risky moves such as waiving the appraisal contingency.” (A contingency is simply anything a buyer or seller must do before closing the deal.)
So despite climbing mortgage rates, not all home shoppers need to sit on the sidelines wondering why they didn’t snag a home when rates were low. Instead, they should use their negotiating position with potential sellers.
“If you didn’t buy last year, you can’t go back in time and buy,” advises Hale. “You need to consider what’s possible now.”