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Spring, the season when home buying and selling activity begins, is just around the corner
The supply of available housing is already starting to rebound: The number of new listings jumped 14.8% from a year ago, the largest annual increase since May 2021, according to new data from real estate website Redfin.
Buyers typically look to get a new home before their children's new school year while the seller's home benefits from fresh flowers and renewed greenery after the winter.
“It's an ideal time for both buyers and sellers, which is why we see so much activity this time of year,” said Amanda Pendleton, home trends expert at Zillow Group.
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However, sellers may benefit from waiting until June to list their property for sale.
In 2023, homes listed in the first two weeks of June sold for 2.3% more, $7,700 more than a typical American home, according to a new Zillow analysis.
“We've learned that real estate cycles don't always happen [at this] “At the time of year,” said Melissa Cohn, regional vice president for William Raveis Mortgage.
Spring Market “turned upside down”
The typical spring home shopping season has been “turned upside down” by the unusual market over the past four years, Pendleton said.
Trends began to shift when the country shut down in March 2020 at the start of the COVID-19 pandemic: “There was no market that year,” Cohn said.
Throughout 2021, buyers have been snapping up homes regardless of the month or season, as ultra-low mortgage rates and flexible remote work policies prompted many consumers to relocate. When March 2022 came, the market ground to a halt as mortgage rates began to rise rapidly, Pendleton explained.
While buyers remained reluctant to buy last year, there was a slight return to seasonal behaviour, she said.
While some experts may see a continuing trend toward normalization, the “good old spring selling season” has not been seen in several years, Cohen said.
“I think people have become more inclined over the course of the year in terms of their attitude toward real estate,” she added.
Interest rate cuts may 'ignite the summer selling season'
In fact, while there may be more buyers and sellers in the coming weeks, a second surge is expected in the summer — an “extended home shopping season,” Pendleton said.
With the Federal Reserve expected to start cutting interest rates as soon as the summer, experts say there could be a renewed surge in buyer demand.
“People are hoping that the first rate cut will happen at the beginning of June. Hopefully that will ignite a summer selling season,” Cohen said. “The trend of mortgage rates over the next two years is likely to be a downward trend.”
However, when mortgage rates start to fall, buyer demand will rise, Pendleton said.
“We could see some upside in terms of home prices with that additional competition,” she added.
Meanwhile, house prices remain high.
The median home sale price in the United States is $412,778, up 6.6% from a year ago, according to Redfin data, which is not seasonally adjusted. The recent increase in supply is not enough to meet pent-up demand in the market, according to Redfin.
However, if you are able to purchase a property now, it may be smart to do so and refinance later. This allows you to get in and out of the real estate market, “before the mad rush happens and prices really start to fall,” Cohn said.
