Home sales are down. Here's why buyers should act now.
Home sales fell last month, according to a Thursday report from the National Association of Realtors (NAR). "Existing-home sales retreated 4.3% in March to a seasonally adjusted annual rate of 4.19 million," the association noted. "Sales fell 3.7% from the previous year. The inventory of unsold existing homes grew 4.7% from one month ago to 1.11 million at the end of March, or the equivalent of 3.2 months' supply at the current monthly sales pace."
The drop in sales isn't shocking news. As homebuyers have had to cope with elevated mortgage interest rates (today's average 30-year mortgage loan rate is 7.26%) and sticky inflation, the budget to buy a house has been strained. But the home sale news doesn't have to be detrimental for buyers, either. With the right approach (and the right buyer profile), you can potentially use the latest report to your advantage. Below, we'll break down why buyers may want to act now that home sales are down.
Start by exploring your current mortgage rate options online today.
Why buyers should act with home sales down
Here are three reasons why buyers may want to pursue a home now that sales are lower.
There's less competition
As the NAR report illustrates, there's generally less competition right now for homebuyers. That's a good thing, particularly after recent years when buyers scrambled to purchase homes at record-low rates. Granted, this advantage is location-based, but, as the report shows, sales are down in most locations in the United States right now. "Among the four major U.S. regions, sales slid in the Midwest, South and West, but rose in the Northeast for the first time since November 2023," the NAR said. "Year-over-year, sales decreased in all regions."
Understanding this, buyers should generally have an easier time finding a home and will have fewer chances of getting into a bidding war to secure the one they want.
Learn more about your homebuying options here now.
Sellers may offer more concessions
Lower home sales mean fewer buyers competing against one another, which isn't good news for sellers looking to move. Against this backdrop, then, buyers may be able to secure more concessions from sellers than they would have received in a different real estate market. So, concessions like having a seller pay for some closing costs or mortgage points, suddenly become more realistic in today's market.
Similarly, there may be more flexibility in terms of sales prices than there otherwise would be. But if you wait for the market to evolve and home sales rise again, these concessions could be taken off the table. So consider being proactive now.
Interest rates are stuck
Home sales are largely down because interest rates are stuck at an elevated level. But remember that the interest rate you secure today doesn't need to be the one you keep long-term. You may even be able to unlock your current one and lock in a new, lower one before closing. And, if not, you could always refinance to a lower rate in the future.
But if you wait for the rate environment to improve (and there's no predicting if or when that will ever happen), you could risk losing the advantages of the aforementioned scenarios.
The bottom line
A drop in home sales may not be advantageous for sellers, but for certain buyers, it can be. Because interest rates are stuck at an elevated level right now, there are fewer buyers to compete against and potentially more concessions to secure from sellers. But, because the real estate market is constantly evolving, these benefits may not be around for very long. An interest rate cut, if it happens, could complicate the homebuying process in seen and unforeseen ways. It makes sense, then, for some buyers to act before that occurs.
