Real estate experts predict a cooler fall housing market, but competition will remain hotter than usual. Realtor.com says experts forecast an increase in listings, which would then slow price appreciation and help to relax bidding wars. Home prices are now 8.6% higher than the same time last year, but that’s significantly lower than April’s 17.2% annual price increase. Experts say housing prices will continue to rise, but at a slower 5% to 6% annual growth. It’s good news for buyers who likely do not need to waive inspections or appraisals to get their bid chosen.
More homes are expected to go up for sale in the second half of the year. The influx won’t be nearly enough to put a dent in the dire housing shortage that’s the main reason for the record prices, but it may help curb the wild price growth.
“It’s still going to be a very strong housing market. Demand is still going to be well in excess of supply,” says Greg McBride, chief financial analyst at Bankrate.com. “It just won’t be as frenetic as what had been experienced earlier in the year.”
In June, there were 2.6 months of housing inventory for sale, according to the National Association of Realtors®. That’s an improvement from 1.9 months in January. However, a balanced real estate market has between 5.5 months and six months of homes for sale.
“We’re seeing the gap narrowing between demand and supply,” says NAR’s director of housing and commercial research, Gay Cororaton. But it isn’t going to even out anytime soon. “There’s still a huge, huge gap.”
The fall homebuying season is likely to be busier than usual
One thing that won’t return to usual is the pace of sales. Usually, the market begins slowing down and prices even dip in the fall; families typically prefer to get settled before the school year begins. But this year, the COVID-19 pandemic threw off the normal timing, and activity is expected to stay brisk after summer’s end.