Spring Market: Will Buyers Bite?

The spring housing market is finally kicking into gear, but will buyers be eager to jump in? There are a lot of factors to consider. For starters, mortgage rates and home prices are both quite high. The average 30-year mortgage rate is around 6. 65%, which is a bit lower than it was in January but still pretty steep. Experts think these rates will stick around for a while, especially with the Federal Reserve not planning to cut interest rates anytime soon. Inflation and economic worries are also keeping these rates up. There is some good news for buyers, though. More homes are hitting the market. Last year was a slow one for home sales, but things are starting to change. In February, there were 17% more existing homes for sale compared to last year, and in March, new listings increased by 10%. This uptick in inventory means buyers have more options and more negotiating power. Sellers, on the other hand, might need to be more flexible with their prices. Over 17% of active listings had price reductions in March, which is the highest since 2016. Economic uncertainty is casting a shadow over the market. Some people are hesitant to buy because they're worried about job security or the overall economy. For example, Jeremy Masem and his wife have been trying to buy a home in Fairfield County, Conn. , but they've had no luck so far. They're considering just renting for a while until things become clearer. This uncertainty is reflected in the data: pending listings fell by 5. 2% year over year in March. Homeownership costs that used to be steady, like insurance or HOA fees, have also been rising in some places. This makes buying a home feel even more risky. On top of all this, the way real estate agents are paid has changed. Sellers no longer automatically pay for both their own agent and the buyer's agent. Now, it's up to the seller to decide. Buyers who want to work with an agent must sign an agreement setting the agent's compensation before they can even start looking at homes. This has added another layer of complexity to the home-buying process. All these changes and uncertainties make the spring housing market a bit of a wild card. Will buyers take the plunge, or will they wait and see how things play out? Only time will tell. One thing is for sure: it's a good idea for both buyers and sellers to stay informed and be flexible.