From Fastcompany · · 2m
Eight U.S. cities tipping toward buyer's markets
Atlanta, Denver, San Antonio and five other metros are shifting in buyers' favor, but higher mortgage rates limit what they can actually afford.
In brief
Atlanta, Denver, San Antonio and five other metros are shifting in buyers' favor, but higher mortgage rates limit what they can actually afford. Eight major U.S. cities are approaching buyer's markets as housing conditions shift nationally, but rising mortgage rates above seven percent reduce purchasing power despite…
Buyers gaining ground nationally
About two-thirds of major metro areas currently favor buyers or are moving in that direction, according to a Realtor.com report released Monday.
Mortgage rates climbing fast
The thirty-year mortgage rate is currently seven point four percent and has been steadily climbing in recent weeks as it approaches the highest level in nearly three years.
Affordability remains a top concern
Danielle Hale, chief economist at the Austin-based Realtor.com, said affordability is likely to continue as a top concern for shoppers, especially as mortgage rates above seven percent limit how much home a fixed budget can…
“Affordability is likely to continue as a top concern for shoppers, especially as mortgage rates above 7% limit how much home a fixed budget can buy.”
Eight cities approaching tipping point
Atlanta, Augusta, Charleston, Chattanooga, Denver, Jacksonville, Memphis and San Antonio could soon tip into buyer's-market territory.
Leverage doesn't mean affordability
Even if buyers have more room to negotiate in these eight cities, that doesn't necessarily translate to a more affordable purchase, according to Jake Crimmel, senior economist at Realtor.com.
Rates and budgets move opposite ways
As rates rise, the same monthly budget supports a lower home price. Market leverage and purchasing power are moving in opposite directions right now, Crimmel said.
“As rates rise, the same monthly budget supports a lower home price. Market leverage and purchasing power are moving in opposite directions right now.”
Buyer's markets growing nationally
Among the ninety-nine largest metro areas, seventeen are currently deemed a buyer's market, up from thirteen this time last year, according to Realtor.com's quarterly Market Clock analysis.
Seller's markets declining sharply
Twenty-seven metro areas are currently deemed seller's markets, down from thirty-nine. Each metro area is positioned on one of twelve clock positions indicating whether buyers or sellers have the negotiating advantage.
Regional split favors the South
The Midwest maintains the most solid seller-friendly dynamics, while the South is leaning more in favor of buyers. This represents a sharp regional split, not a single national pattern.
“That is a sharp regional split, not a single national pattern.”
The essence
Eight major U.S. cities are approaching buyer's markets as housing conditions shift nationally, but rising mortgage rates above seven percent reduce purchasing power despite improved negotiating leverage.
