Housing News

Fall Homebuying by the Numbers: 5 Signs Homebuyers Have More Leverage

Homebuyers heading into fall may find the balance of power shifting a little more in their direction.

More homes are lingering on the market, price cuts are common, and there are more properties to choose from. For homebuyers ready to make a move, those conditions could create more opportunities to secure the right home.

“Less competition gives well-prepared buyers a better chance to compare options and negotiate with confidence,” wrote Zillow Chief Economist Mischa Fisher in a recent report.

Here are five numbers that could work in homebuyers’ favor this fall.

1.41 million: Homes for sale

There were 1.41 million homes for sale nationwide in August, up 3% compared with the same time last year, according to Zillow. New listings were also up 2.4% from a year earlier.

More housing stock gives homebuyers a larger pool of properties to consider, which may make it easier to find a home that fits their needs and budget.

Homebuyers may want to compare several properties before making an offer and pay attention to homes that have been sitting on the market longer. Sellers of these homes may be more motivated to offer concessions or cut the price to get a deal.

26.3%: Listings with a price cut

More than one in four listings had a price reduction in August.

This was half a percentage point higher than a year earlier, according to Zillow. This suggests some sellers are adjusting their expectations to attract homebuyers.

A price reduction can lower the amount a homebuyer needs to finance with a mortgage. Before making an offer, homebuyers can also check a property’s price history to see whether the seller has already reduced the asking price and how long the home has been listed.

A price cut may also signal that a seller could be open to negotiating on other parts of the transaction.

2.6%: Drop in newly pending sales

Newly pending sales fell 2.6% compared with a year earlier in August, according to Zillow.

For homebuyers, slower sales activity may mean fewer people competing for some properties. That could give them more time to consider an offer or reduce the chances of facing multiple competing bids, depending on the local market.

With fewer homes going under contract, homebuyers may also have more room to negotiate beyond price. Depending on the property and local market, they could ask for help with eligible closing costs, repairs, or other money-saving concessions.

27 days: How long it takes a home to hit pending status

The typical home spent 27 days on the market before going pending in August. That was two days longer than in July.

Those extra days give homebuyers more time to tour properties, compare options, review their finances, and decide what they are comfortable offering.

The longer a home has been listed, the more important it may be to find out why. Homebuyers can ask whether there have been previous offers, whether the price has been reduced, and which terms matter most to the seller before deciding what to offer.

1.3%: Annual home value growth

The typical U.S. home was valued at $369,678 in August, up 1.3% from a year earlier, according to Zillow. Home values dipped 0.1% from July.

The slower pace of annual price growth may provide some relief for homebuyers after the sharp increases in home prices earlier this decade.

Homebuyers can use recent comparable sales in the neighborhood to help determine whether a home’s asking price reflects current market conditions before deciding what to offer.

How homebuyers can make the most of their leverage

Negotiating the price is only one way homebuyers may be able to make the numbers work.

“With homebuyers potentially having more negotiating power this fall, I recommend looking into different loan options to help make their mortgage payment more affordable,” said Armine Arutunian, a loan consultant with New American Funding in Pico Rivera, Calif. “For example, there’s the 3-2-1 buydown option.”

A 3-2-1 buydown can temporarily lower the interest rate and monthly payment during the first three years of the mortgage.

Getting pre-approved for a mortgage can help homebuyers understand their budget and estimated monthly payment before making an offer.

Armine Arutunian NMLS #251075