The current housing market condition is good news for home buyers. Prices leveling off, coupled with interest rates hitting the level last seen since early 2018 improves housing affordability and provides an opportunity for people who want to buy. The monthly mortgage payment of a median-priced home in California fell 1.8 percent from last year’s level and was the first year-over-year drop in 32 months. Homebuyers took notes and some have already seized the opportunity, as pending home sales rose for the first time since January 2018.
Homeowners who are eager to sell should also feel enthusiastic about the lower-rate environment, especially if their houses have been sitting on the market for a longer-than-expected time period, and they had to make any price concessions. As costs of housing remain relatively low, the increase in home buying power will lead to greater market potential for sales. With interest rates expected to remain below last year’s levels in the next few months, housing demand should improve in the short term as buyers who had given up on homeownership are motivated to re-enter the market.