With high mortgage rates and home prices, the housing market in 2024 was not favorable to buyers. Luckily, a new year brings new possibilities. It’s important to be aware of market changes to capitalize on beneficial opportunities.
Besides more noticeable cues like lower rates and prices, there are some subtle signs to look for that may signal an improving housing market for buyers.
Here are the top indicators to keep track of:
Stale Listings
A house listing is considered stale if it’s been on the market for 60-90 days or more. An increase in listings that stay on the market longer may indicate a shift to a buyer’s market. Due to a lack of offers, owners with stale listings may feel inclined to lower prices or offer seller concessions. Buyers can find stale listings using search filters on real estate marketplaces to see listings that have been on the market for an extended period.
Increase in Home Supply
Keeping track of the number of new homes added to real estate marketplaces is another great way to understand the state of the housing market. An increase in listings might show that demand is shifting, giving homebuyers more options while facing less competition. This decreases the number of bids on a house, giving buyers more leverage to negotiate the price down.
Absorption Rate
The absorption rate helps us know how fast current house listings are selling. Buyers can use this calculator to evaluate if the market is a seller’s or buyer’s market. Absorption rates over 20% indicate a seller’s market, while rates below 15% signal a buyer’s market. Much like stale listings, a low absorption rate can be used to predict a decrease in housing prices and competition from other homebuyers.
Although the U.S. is currently in a seller’s market, it’s important to know the signs that could indicate a change. Being prepared can help buyers know when the time is right for them to begin their homebuying journeys.
