Douglas Elliman real estate broker Noble Black highlights the contributing factors that is causing a spike in New York City luxury home sales and whether return-to-office plays a role.
The U.S. housing market is entering the most buyer-friendly spring since the COVID-19 pandemic, according to a real estate expert.
Realtor.com senior economist Joel Berner told FOX Business that now is a good time for buyers to enter the market after years of subdued transactions, especially in 2024, which shaped up to be the slowest year for existing home sales since 1996, according to the firm’s data.
He believes the housing market is transitioning from a seller’s market to a more balanced one, with increased inventory, more price reductions, longer time on the market and lower listing prices compared to last year, with all contributing to the current buyer-friendly conditions.
THESE HOUSING MARKETS WERE THE HOTTEST IN JANUARY, ACCORDING TO REALTOR.COM
“Independent of mortgage rates, we’re seeing things move in a pretty buyer-friendly direction right now,” he said. Berner added that falling mortgage rates aren’t necessarily indicative of a buyer’s market, as they can lead people to rush into the market, driving prices higher.
Mauricio Umansky, founder of the billion-dollar real estate brokerage The Agency, doesn’t expect to see the same level of opportunities for buyers as during the housing crisis of 2008-2009, but he is confident the housing market is moving into a buyer’s market.
Like Berner, Umansky said that current market conditions are favoring buyers, noting that there are “great opportunities for buyers to be aggressive and write strong offers.”
Mauricio Umansky doesn’t expect to see the same level of opportunities for buyers as during the housing crisis of 2008-2009. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images) / Getty Images)
“2025 is going to look significantly better than that because of what’s on the market right now, a lot more options for folks, a lot better prices for folks and people deciding that… it might be a good time to get on the sidelines,” Berner said.
Umansky said inventory is beginning to rise and, as a result, “sellers have become more lenient” with regard to price. Right now, Umanksy said there will likely be some reductions in asking prices, though nothing extreme.
HOMEBUILDERS ARE CONCERNED ABOUT NEW TARIFFS AND EFFECT ON MATERIAL COSTS
Higher mortgage rates over the past three years have created a “golden handcuff” effect in the housing market as sellers who locked in a record-low mortgage rate of 3% or less when the pandemic began have been reluctant to sell, limiting supply and leaving few options for would-be buyers.
Berner said the firm’s original 2025 forecast pegged interest rates to fall to around the low 6% range by the end of the year. The average rate on a 30-year fixed mortgage is currently 6.65%, according to Freddie Mac.
“The walk-in effect has really been in place the last couple of years. We’re not really in a mortgage rate environment where we can say the lock-in effect is dead,” Berner said. “I think what we’re seeing is a lot of people who have been waiting out the market and waiting on mortgage rates, but at some point, families grow, jobs change and people have to move. And so that’s why we’re seeing more listings right now, including those that maybe would have listed in the last couple of years but decided not to.”
The average rate on a 30-year fixed mortgage is currently 6.63%, according to Freddie Mac. (REUTERS/Sarah Silbiger/File Photo / Reuters Photos)
Realtor.com’s February housing data highlighted how sellers are increasingly adjusting to slower market conditions, as the share of homes with price reductions rose significantly last month.
Higher mortgage rates over the past three years have created a “golden handcuff” effect in the housing market. (Justin Sullivan/Getty Images / Getty Images)
According to its data, the number of homes actively for sale has grown for the 16th straight month, increasing 27.5% in February compared with the same period a year ago.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The number of homes sold, including homes under contract, increased by 18.2% compared with last year, according to the data. Homes also spent 66 days on the market, which was nearly a week longer than last year.
Umansky said that the gap between the asking price and the sale price is widening, as more buyers are bidding lower. As this trend persists, sellers will likely need to lower their home prices to make a sale.
