Hopeful home buyers who plan to make offers by the end of 2017 are in luck. According to recent data, home prices in the U.S. are falling, continuing a trend we’ve been seeing since July. So while it may not be the optimal time for homeowners to sell, it’s a great time for buyers (especially first time buyers) to step into the market and find their dream home.
According to a recent article from realtor.com, the median price of an existing home (one that has been previously lived in) dropped .24% from September to $247,000 in October. Realtor.com gathered this data from their most recent National Association of Realtors report.
Although the price difference may not seem like much, in today’s marketplace, where many would-be buyers are pinching pennies to save for a down payment, every little bit helps.
Prices Have Been Falling Since Summer
According to Realtor.com, home price have been falling every month since hitting a high of $263,300 in June. The fact that homes sell for more during the spring and summer months is typical, as seasonal differences affect buyer traffic and demand.
“We usually see prices go down as we move into the fall,” said realtor.com chief economist Danielle Hale. “Buyers who are in the market now are usually looking for smaller properties that tend to cost less. [But] in spite of the month-to-month price decline, it’s still a pretty tough market for buyers. There aren’t very many options of homes available for sale.”
The small inventory of existing homes for sale certainly makes the current market challenging for buyers, even with more new construction popping up every day. Existing homes are generally more affordable than new construction, realtor.com says. According to their sources of government data, the median price of a newly constructed home in the US was $319,700 in September. And although that figure is nearly 30% lower than the previous month, median home prices are still 5.5% higher year-over-year.
Home Sales Increased in October
Home sales in October increased 2% since September; however, they dropped around 0.9% from a year earlier, according to the seasonally adjusted figures in the report. Seasonal adjustment allows data collectors to smooth out the numbers over a 12-month period to account for seasonal fluctuations in the market, realtor.com says.
Monthly closings increased across the U.S. in October but dipped on an annual basis, particularly in the South, where they fell 1.8%. October closings also dropped in the Midwest, where they fell 1.5% compared to the previous month. Realtor.com noted that the drops in the South may have been due to Hurricanes Harvey and Irma, which “hammered the Houston area and much of Florida and paused many sales temporarily.”
Despite low levels of inventory, National Association of Realtors (NAR) Chief Economist Lawrence Yun says now is a good time to buy.
“Job growth…is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home,” said Yun in a statement. “While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
The cost of buying an existing home dropped in every region in the U.S. except the West, according to the report. The median price of homes in the West was $375,100. Home to expensive areas such as Silicon Valley and cities like San Francisco and Seattle, it’s no surprise that the West typically sees the highest regional prices and rarely sees them fall. The October median price for homes in the West is .48% higher than it was in September and is 7.8& higher than it was a year ago.
The region with the second-highest median sale price was the Northeast, at $272,800. That’s down 0.8% month-over-month but 6.6% higher on a year-over-year basis.
The South recorded the third-highest median sale price in October at $214,900. That figure represents a 1.1% decline since the previous month but a 4.6% increase since October 2016.
The cheapest homes were in the Midwest, according to realtor.com, where the October median sale price came in at $194,700. That represents a 0.9% drop from September and a 7.1% rise from October 2016.
Want to read more about the latest stats and trends in real estate? Check out these other posts:
- New Home Sales Pace Hits 10 Year High
- MBA Predicts $1.2 Trillion Increase in Purchase Originations in 2018
- Are Baby Boomers to Blame for the Housing Shortage?