We are officially in the third quarter of 2021, but let’s look back at how the housing market unfolded during June. Some glimmers of hope pointing to a shift back toward normalcy. The three key elements are driving this competitive market: Prices, Inventory, and Interest Rates.
Prices are increasing, but there is a ceiling.
Compared to May 2020, we have seen a 15% increase in the price of homes. The average sale price of a home bought in May of 2020 compared to a house bought in May of 2021 has increased by 15%.
“This means, for somebody that bought a house in May of last year, on average they have gained 15% equity in the last year. Which is awesome!”
We are seeing signs that competition is calming down in some zip codes. The ceiling is starting to form on what buyers are willing to pay. In certain areas, homes are beginning to stay on the market longer, going through price decreases to sell. There are still many areas that prices are increasing rapidly, but we hope to see this taper down in the coming months.
Inventory has a big impact on the June housing market.
There are still a lot of buyers and not a lot of homes on the market. Since June 2020, there has been a decrease in inventory by 61% from last year at this time. However, in the previous three months, we have seen a slight increase in housing options, but we have also seen a decrease in the number of homes that have gone under contract during that same time.
“This decrease in the number of homes under contract and increase in the number of homes on the market is a hopeful sign that we’re moving in the direction of some normalcy in the market, where the competition may mellow out a bit.”
Interest rates are low but expected to increase.
As of right now, the interest rates are still low, hovering around 3%. However, it is almost unanimous that the Fed is going to raise rates sooner than expected. For a long time, it was said that rates wouldn’t be raised until 2023. Many feel that it may start as early as next year, with some experts saying rates may increase twice during 2022.
“While those interest rates are still low, we do see and do believe they will start trending upward, which again will be another factor that will bring a little bit more normalcy in the market.”
If you are in the market to buy or sell a home, please reach out to us at email@example.com or call us at (407) 906-2456. We would love to set up a time for an in-person consultation or phone call with one of our experienced agents where we can fully understand your real estate needs. In the meantime, check out Alexis Nickley’s key tips on what to look for in a Realtor.