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Spring, the season when home buying and selling activity kicks off, is around the corner.
Available housing supply is already rebounding: The number of new listings jumped 14.8% from a year ago, the largest annual gain since May 2021, according to new data from Redfin, a real estate site.
Buyers are typically looking to land a new home before their children’s new school year while a seller’s house benefits from the fresh flowers and renewed greenery post-winter.
“It’s sort of an ideal time for both buyers and for sellers, and that’s why we just see a lot more activity that time of year,” said Amanda Pendleton, a home trends expert at Zillow Group.
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However, sellers might benefit from waiting until June to put up their property for sale.
In 2023, homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home, according to a new Zillow analysis.
“We’ve learned that real estate cycles don’t always happen [at this] time of year,” said Melissa Cohn, regional vice president at William Raveis Mortgage.
Spring market was ‘flipped on its head’
The typical spring home shopping season has been “flipped on its head” due to an unusual market over the past four years, Pendleton said.
Trends started shifting when the country locked down in March 2020 at the start of the Covid-19 pandemic: “There was no market that year,” Cohn said.
Throughout 2021, buyers were purchasing homes no matter the month or season, given ultra-low mortgage rates and flexible remote-work policies that led many consumers to relocate. Then when March 2022 came around, the market stalled as mortgage rates began to rapidly increase, Pendleton explained.
While buyers were still holding back last year, there was a slight return to seasonal behaviors, she said.
While some experts may see a continued trend toward normalization, “the good old-fashioned spring selling season” hasn’t been seen in several years, Cohn said.
“I think people have become sort of more year-round in terms of their attitude towards real estate,” she added.
Rate cuts could ‘ignite a summer selling season’
In fact, while there may be more buyers and sellers in the coming weeks, a second surge is anticipated in the summer — an “extended home shopping season,” Pendleton said.
With the Federal Reserve expected to begin cutting rates as soon as the summer, there could be a renewed surge in buyer demand, experts say.
“People are hoping the first rate cut will be at the beginning of June. That hopefully will ignite a summer selling season,” Cohn said. “The direction of mortgage rates over the course of the next two years is probably a downward one.”
However, when mortgage rates begin to come down, buyer demand will rise, Pendleton said.
“We could see a bit of a bump in terms of home prices with that added competition,” she added.
Meanwhile, home prices are still elevated.
The median U.S. home sale price is $412,778, up 6.6% from a year ago, according to Redfin data, which is not seasonally adjusted. The recent boost in supply isn’t enough to meet the pent-up demand in the market, according to Redfin.
Yet if you can afford to buy a property now, it may be smart to do so and refinance later. That allows you get in and out of the real estate market, Cohn said, “before the mad rush happens and rates really start to come down.”
