Interest rates

Homes are spending longer on the market amid rising interest rates

Just look at mortgage interest rates to know which way the wind is blowing. Rates are approaching 7% for a 30-year fixed rate mortgage, higher than they have been in about two decades.

But for buyers who can afford it, the market downturn could make for a slightly less stressful experience.

When Lauren Piner started working as a real estate agent in Florence, South Carolina last year, it was exhausting.

“If we saw a house appear on the market, we would run like we were on fire — that day, running through the house and making an offer if they liked it,” Piner said.

But in recent months, the pace has slowed. “They can really go home and sleep on it and talk to their lender, talk to their family. Buyers have some leeway now.

Listings stay on the market for about 19 days, according to Jeff Tucker of real estate site Zillow. That’s compared to a week or less in the spring.

“Homes are taking much longer to sell than at any point in the pandemic so far,” he said. And that has an effect on prices.

“When sellers go one weekend after another without getting an offer, they start worrying that their home is priced too high,” Tucker said.

More than 27% of listings on Zillow last month had a price drop – a new high.

Even after an offer is accepted, buyers are in a better position than before. Over the past two years, fierce competition has resulted in many buyers foregoing inspections and rush into escrow, said Lawrence Yun of the National Association of Realtors.

“But today, with calmer market conditions, the home inspection we insist“, said Yun.

The inspection results may lead to a new round of negotiations, according to Tim Manickam, an agent who recently worked with a vendor in Portland, Oregon.

“The buyer came back with a long list of things my seller was willing to do and got done,” he said. “Buyers are asking for repairs, they are asking for closing costs. This is increasingly becoming the norm.

That is to say, it becomes the norm again… again.

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