The housing market’s recovery has been shoring up the U.S. economy, but it is still challenging for homebuyers, according to real estate market trends tracked by a new survey conducted by real estate brokerage Redfin.
Now is an advantageous time to sell, say two-thirds (65 percent) of 468 Redfin agents surveyed in the fourth quarter. This is down from 72 percent in the third quarter and 86 percent, a 2013 benchmark, in the second. Just over half (56 percent) of surveyed agents said that it was a good time to buy a home in their area.
Nearly nine-in-ten respondents (87 percent) said that low inventory is the primary challenge for potential homebuyers, which is necessitating more aggressive strategies. While nearly half (45 percent) of agents said that buyers delayed their search during the holidays, more than one-third of buyers (35 percent) are willing to pay more than the seller’s asking price, while just over three-in-ten (31 percent each) are willing to either be flexible on the features they want or are lowering their expectations.
Almost two-thirds (63 percent) of sellers consider “unrealistic expectations” as their primary challenge, the survey finds. Higher mortgage rates could seriously impact real estate market trends, agents fear. Almost four-in-ten (39 percent) said that mortgage rates of 5.5 percent would significantly limit sales and price gains, while one-third said mortgage rates of 6 percent would have the same effect.
Industry analysts project that mortgage rates could exceed 5 percent later this year. Rates for a 30-year fixed-rate mortgages hit 4.69 percent last week, according to Bankrate.com.
The most recent National Association of Realtors report showed that sales of previously-owned homes in November dipped 1.2 percent to an annual rate of 4.9 million sold. This was the third consecutive month of sales decline, which NAR attributes in part to the higher mortgage rates. Tight credit and limited inventory are other factors.
There are, though, encouraging real estate market trends. The bottleneck in new home construction may be easing, CNN reports. A December government report showed housing starts were up 19 percent of the first 11 months of 2013 compared to a year ago. However, the pace of home building is 25 percent below long-term averages.
The median home price of homes sold in November was $244,500, up 7.3 percent from a year ago, the government report found.
The NAR’s Pending Home Sales Index, an indicator based on contract signings (but not closings), ticked upward 0.2 percent in November. The National Association of Home Builders also reported that, except for October 2013, sales of newly-built, single-family homes in November enjoyed their strongest paces since July of 2008.