The Truth About Today’s Buyer Demand | North Scottsdale Real Estate & Luxury Homes | Team Picarello

The Truth About Today’s Buyer Demand

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When it comes to the latest news in real estate, there are a lot of sensational headlines in the media. In times like this, when it can be hard to know what to believe, put your trust in the experts. Those of us in the housing market respect that buying or selling a home is a major life decision, and we offer advice based on what the data shows.

Despite what you may have read, the housing market is still undeniably strong. Here’s a look at what leading experts have to say about buyer demand today and how it continues to shape the industry:

Michael Lane, President at ShowingTime:

“In general, there are definite signs of cooling demand. However, buyer traffic is still at historically high levels compared to pre-pandemic showings.”

Odeta Kushi, Deputy Chief Economist at First American:

“Seasonally adjusted purchase applications tick up slightly to the highest level since July. Demand for homes remains strong and steady. Excluding 2020 (not a good benchmark) purchase applications are the strongest in a decade.” 

Selma Hepp, Deputy Chief Economist at CoreLogic:

“Home buyer demand pushed price growth to a new record high in June, with S&P CoreLogic national Case-Shiller Index clocking in an 18.6% year-over-year growth rate. The month-to-month index jumped 2.18%, making it another strong monthly growth, and the fastest May-to-June increase since the data series began.”

What It Means for You

As a seller, buyer demand is an important factor that helps influence how fast your house will sell and how many buyers may be competing for it. When buyers have to compete against each other for a limited supply of available homes, bidding wars can drive prices up. While things have cooled slightly since the peak of the pandemic housing rush, buyer demand is still far surpassing historical norms. That’s why we’re still in a sellers’ market.

Bottom Line

If you’re torn on whether or not you want to sell your home this year, rest assured it’s still a great time to make a move. Let’s connect to discuss how you can sell now and do it on your best terms thanks to today’s buyer demand.

July 2021 Market Update

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Note: July 2021 data below are the most recent released by the National Association of Realtors.

Existing-home sales rose in July, marking two consecutive months of increases, according to the National Association of Realtors®. Three of the four major U.S. regions recorded modest month-over-month gains, and the fourth remained level. Figures varied from a year-over-year perspective as two regions saw gains, one witnessed a decline and one was unchanged.

Total existing-home sales (transactions that include single-family homes, townhomes, condominiums and co-ops) grew 2.0% from June to a seasonally adjusted annual rate of 5.99 million in July. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020).

National Association of Realtors July 2021 Data

"We see inventory beginning to tick up, which will lessen the intensity of multiple offers," said Lawrence Yun, NAR's chief economist. "Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren't seeing as much growth because there are still too few starter homes available."

Total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June's supply and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.

The median existing-home price for all housing types in July was $359,900, up 17.8% from July 2020 ($305,600), as each region saw prices climb. This marks 113 straight months of year-over-year gains.

"Although we shouldn't expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve," said Yun.
 
"In the meantime, some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates," he added.

Properties typically remained on the market for 17 days in July, unchanged from June and down from 22 days in July 2020. Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.

First-time buyers were responsible for 30% of sales in July, down from 31% in June and down from 34% in July 2020. NAR's 2020 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 31%.

Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in July, up from 14% in June but even with 15% from July 2020. All-cash sales accounted for 23% of transactions in July, even with June and up from 16% in July 2020.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.87% in July, marginally down from 2.98% in June. The average commitment rate across all of 2020 was 3.11%.

"As more homes come on the market, opportunities for prospective buyers continue to increase in regions across the country," said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby's International Realty. "But even though we are beginning to see some normalcy return, NAR continues to work alongside legislators and policymakers to ensure we are doing everything we can to boost the supply of safe, affordable housing in America."