The median price of homes for sale dropped by 0.9% annually in June, signaling the first such decline in six years, according to data by Realtor.com. In addition, the median listing price on a per-square-foot basis continued a downward year-over-year trend for the second month in a row, Realtor.com said.
“While the median asking price for a home grew seasonally, we saw the first year-over-year decline in the median list price dating back to 2017, the starting point of our trend data history,” Realtor.com said in its report.
But homebuyers have found themselves in a market of volatile availability, according to the report.
“Growth in the inventory of homes actively for sale slowed nationally and declined in many metropolitan areas across the country as sellers continued to list fewer homes than last year and buyers competed over the remaining affordable homes for sale,” Realtor.com said in its report.
Some reports have suggested potential homebuyers are in a severely tight housing market. The number of homes for sale in June declined by 15%, hitting an all-time low and the biggest drop in two years, according to a report by Redfin.
If you’re thinking about becoming a homeowner, it could help to shop around to find the best mortgage rate. Visit Credible to compare options from different lenders without affecting your credit score.
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Housing demand heats up
With the number of available homes for sale dropping to record lows, potential homebuyers have been locked in a heated housing market, according to the Redfin report.
In fact, pending home sales in June increased 1.9% from a month prior, marking its highest level since fall.
“Pending sales have now climbed for three consecutive months on a revised basis following 16 straight months of declines,” Redfin said in its report. “Pending sales fell 16.2% year over year in June, the smallest annual decline in a year. Still, pending sales in June were lower than they were at any point during the three years leading up to the pandemic.”
And the median number of days a house spent on the market in June was 29, compared to 11 last year, according to the Redfin report.
“Sellers are getting multiple offers if their home is priced well and in a desirable area even though there aren’t a lot of buyers out there,” Fairweather continued. “That’s because house hunters have so few homes to choose from. More buyers are starting to come out of the woodwork as they get used to elevated mortgage rates, which is making the market feel even hotter.”
But as inflation continues to cool, mortgage rates are expected to gradually drop even if it’s not at a pace that would attract a critical mass, Redfin said. Still, potential homebuyers could find the right mortgage rate by shopping around.
If you’re looking for the best mortgage rate, you could consider visiting the Credible marketplace to get your personalized rate from multiple lenders in minutes.
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How to improve your mortgage credit score
Raising your credit score can help potential homebuyers access the best mortgage rates available. That’s because many lenders consider a credit rating system like the FICO scoring model to determine a borrower’s ability to meet obligations. FICO scores typically range from 300 to 850. Here are some ways potential homebuyers can boost their credit scores.
Check credit reports: By law, consumers have access to free credit reports once a year from the three main credit bureaus TransUnion, Equifax, and Experian. Potential homebuyers could examine these to see what areas of their credit usage need attention. They also could help people spot discrepancies to dispute like fraudulent accounts.
Avoid missing payments: Being able to make timely payments on credit cards, utility bills, phone bills and other obligations could significantly impact credit scores. So keeping up with regular payments is crucial.
Pay down high-interest debt: Credit scores are heavily influenced by credit utilization or the percentage of credit you’re using compared to available credit on products like credit cards. Focusing on paying down this debt could boost credit scores significantly.
Avoid taking on new credit: Taking on new debt could raise debt-to-income ratios (DTI) or the percentage of gross monthly income that covers debt payments. A high ratio may not seem favorable to creditors. Mortgage lenders typically prefer no credit inquiries or new accounts on credit reports within six to 12 months of applying for a mortgage, according to a post by Expirian.
Improving credit scores can benefit a person’s entire financial picture and improve access to the best rates across products like mortgages, credit cards and auto loans.
“If you plan to buy a home in the coming year, taking steps now to spruce up your credit profile can increase your chances of qualifying for a mortgage and reduce the amount of interest you’ll be charged on the loan,” Experian said in a post.
If you’re considering jumping into the housing market, it could benefit you to shop around for the best rates. Visit Credible to speak with a mortgage expert and get your questions answered.
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