The Housing Market This Holiday Season

 As the holiday season begins the housing real estate market is seeing some changes. Mortgage rates are high peaking at around 7.23% as of late September. As the year comes to and end, here is what the housing market looks like.

There is a decrease in demand due to everyone focusing on the festivities during the holiday season. With the focus on the holidays, there are fewer new listings and fewer interested buyers looking. This can present a unique advantage if you are willing to work with the market during the holiday season.

If you want to list, your home could sell quicker during this time and if you are a buyer, there will not be as much competition. Buyers and sellers that are doing transactions during the holidays are very motivated. Often times this could be due to relocation for a new job, an unexpected growth in your family or a big life-changing event.

Investors are always on the clock even during the holidays. Investors know the slower months are a great time to snag a good deal. During the holiday season, sellers are very motivated. Since the market is slow, this is also a good time for a local real estate agent to connect with any local investors.

A digital age with virtual tours makes it easier to shop for a house during the holiday season. In fact, ever since the pandemic, virtual home tours have become the norm. Nowadays a buyer can tour a home 24/y in this digital age.

Negotiations and pricing adjustments are another benefit to holiday home buying. The decreased activity in the market, makes it a great time for those who decide to trudge on. The end of the year can be a great time for a financial transaction. There are benefits for taxes when you buy at the end of the year. It’s also notable that historically, interest rates tend to drop during the holiday season. While interest rate fluctuations are dependent on a variety of factors, the decrease in demand around this time can sometimes prompt lenders to offer more favorable terms to incentivize purchases.

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Cash Sales Are Beating Out FHA-Backed Sales In Today’s Market

ccording to the National Association of HomeBuilders’ study of the U.S. Census Bureau’s Quarterly Sales by Price and Financing more homes were purchased by cash in the third quarter of 2022.  This is the first time a cash sale has beat out an FHA loan since 2007.  The share of cash purchases climbed 9.5% to a 20-year high which amounted to 14,000 sales. 

New home sales through the Federal Housing Administration (FHA) came in only at 11,000 sales which was 7.5% of the total sales in the third quarter of 2022.  The share has dropped close to two-thirds since spring of 2020.  Conventional loans made up 77.6% of new home sales in the third quarter of 2020 while VA loans declined to 5.4%.

The national median sales price of a new home was $454,900 in the second quarter of 2022.  This was a 5% increase but there is still a big difference in the type of financing percentages.  New home sales with all-cash increased 27.3% since the beginning of while FHA-backed sales have decreased 7.6%.  The median prices varied for new homes by the type of financing, conventional $503,200, FHA, $340,300, VA $432,200 and cash $494,200.

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