Housing News

Homebuyers Have More Homes to Choose from at Lower Prices Page

Homebuyers who have struggled to find the right home may finally have more options at lower prices.

More than 1.16 million homes were actively listed for sale nationwide in September, a 5.4% increase from a year ago, according to the latest Realtor.com housing report.

Housing stock is also nearing pre-pandemic levels. The gap between the number of homes for sale today and typical pre-pandemic levels narrowed to 9.1% in September, according to Realtor.com.

Additionally, the national median listing price fell to $419,250, down 1.4% year-over-year. September was the 11^th month in a row where home prices were down compared to the same month a year earlier.

“Buyers have more options to choose from and a less frenetic pace to deal with than they did just a few years ago, allowing them to negotiate…and do more due diligence on their home purchase,” said Joel Berner, senior economist at Realtor.com.

For homebuyers, that could mean less pressure to rush into an offer and more time to evaluate a property before deciding if it’s the right fit.

Housing stock is recovering across the country

Forty-three of the 50 largest metropolitan areas had more homes for sale in September than they did a year earlier, according to Realtor.com.

The Northeast and Midwest saw the largest increases. Active listings rose 11.6% year-over-year in the Northeast and 11.3% in the Midwest. The West saw a 6.2% increase, while the South’s housing stock was up 2.6%.

The shift is particularly striking compared with the market during the pandemic, when a historically low housing stock fueled fierce competition.

“During the ultra-low mortgage rate period at the peak of the Covid pandemic, demand for home purchases surged, and the supply of homes simply couldn’t keep up,” said Berner.

Homes frequently sold quickly and above asking price as homebuyers competed for a limited number of properties.

Housing stock has been gradually recovering since then, Berner said, helped by a slower pace of sales and stronger new construction in many areas.

In some metropolitan areas, particularly in the South and West, the number of homes for sale now exceeds pre-pandemic levels, according to Berner.

Homebuyers may have more negotiating power

More than one in five homes for sale, 20.8%, had a price reduction in September. That was up from 19.9% a year ago and marked the highest September share on record, according to Realtor.com.

“Buyers are more likely to see price reductions out on the market and have a better chance of at- or below-asking price offers being accepted,” said Berner. “More [housing] inventory means better buying conditions across the board.”

Depending on the home and local market, homebuyers may also be able to negotiate for assistance with eligible closing costs, repairs, or a mortgage rate buydown.

The opportunity varies by market

Price reductions were most common in the West, where 22.8% of listings had received a price cut. The South followed at 21.6%, the Midwest at 20.7%, and the Northeast at 15.2%.

Among the 50 largest metros, about one-third of listings had received a price reduction in Salt Lake City, Denver, and Portland, Ore.

“Buyers are gaining negotiating power, but that does not look the same everywhere,” said Jake Krimmel, senior economist at Realtor.com. “Local supply, affordability, and rate sensitivity are increasingly determining how quickly each market adjusts.”

Homebuyers can work with their real estate agent to understand how much housing stock there is available locally, how long properties are taking to sell, and whether sellers are reducing their asking prices.

Those conditions can help homebuyers identify where they may have room to negotiate while still focusing on a home that fits their needs and budget.

Get financially prepared before making an offer

With more homes to consider, homebuyers can also use the extra breathing room to get their finances in order. Getting pre-approved for a mortgage can help them understand how much they may be able to borrow and what their estimated monthly payment could look like before making an offer.

Homebuyers can also talk with their lender about which loan options may be best for them. Popular options include Conventional, Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), and U.S. Department of Agriculture (USDA) loans.

Knowing those options ahead of time can help homebuyers focus their search on homes that fit their budget.