Finance
Housing begins to tip in favor of buyers; sellers slash prices to entice them back to market: report
Buyers may finally get the upper hand in the housing market. (iStock)
As buyers retreat from housing, some home sellers have had to cut their listing price to close the sale, a recent Zillow report said.
Nearly 1 in 4 sellers have had to cut prices to try and get buyers struggling with affordability interested in buying – 24.5% of listings in June had a price cut, up from 23.8% the previous month. The lack of buyer appetite is also contributing to an increase in inventory. The total number of homes on the market increased 4% from May to June to stand nearly 23% above last year’s low level. Well-priced and marketed listings are still selling relatively quickly.
Market dynamics are shifting toward a pre-pandemic normal in terms of competition among buyers and their negotiating power, Zillow said.
“A growing segment of homes that aren’t competitively priced or well marketed are lingering on the market,” Zillow Chief Economist Skylar Olsen said. “Sellers are increasingly cutting prices to entice buyers struggling with affordability.”
“For years, the housing market has been defined by fast sales and few options,” Olsen continued. “Now it’s starting to look more like it did before the pandemic in terms of competition, if not costs. As the wait for mortgage rate relief drags on, slower price growth and even dips in some areas will help buyers catch up on saving for a down payment.”
If you’re considering becoming a homeowner, it could help to shop around to find the best mortgage rate. Visit Credible to compare options from different lenders and choose the one with the best rate for you.
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Home price appreciation slows
Buyers continue to struggle to get a foot on the housing ladder due to affordability challenges mainly driven by expensive borrowing rates and high home prices. According to Zillow, the typical mortgage payment is up 6% from last year and has increased by 112.5% since the pandemic.
The good news is that there is evidence that home price appreciation is slowing in some markets, Zillow said. The typical home value increased by 0.6% in June to $362,482, but the monthly growth is the lowest seen in any June since 2011. Zillow has forecasted home values to rise just 1% nationally through June 2025, which could give buyers who are currently in the market some relief.
“Home value growth has slowed as inventory rises,” Zillow said. “Annual appreciation is a reasonable 3.2% nationally, down from a 2024 peak of 4.6% in March. Monthly growth has decelerated to 0.6% — the slowest June appreciation since 2011. Slower home value growth in the months ahead could give struggling buyers a chance to make up ground.”
If you’d like to see if you qualify for a mortgage based on your current credit score and salary, consider visiting Credible, where you can compare multiple mortgage lenders at once.
Mortgage rates tip lower
Mortgage rates have tumbled for several weeks running, dropping to the lowest level since mid-March. Strong economic data and a positive inflation report provide some reassurance that the Federal Reserve may finally pull the trigger on interest rate reductions.
The Fed, which has held its policy rate in the 5.25%-5.50% range for the past year, may soon cut borrowing costs. Speaking at the Economic Club of Washington D.C. earlier this week, Fed chair Jerome Powell said that due to the policy’s long lag effect, the central bank won’t wait for inflation to hit the 2% target rate before cutting interest rates. Instead, it seeks greater confidence that inflation will return to the target before initiating rate cuts.
“Fortunately, June’s more moderate jobs report and cooling CPI were solid readings that should help the Fed gain more confidence that the economy is moving in the right direction and could raise hopes for a rate cut signal in the July FOMC statement,” Realtor.com Economist Jiayi Xu said in a statement.
If you are ready to shop for the best rate on a new mortgage, consider visiting an online marketplace like Credible to compare rates with multiple lenders at once.
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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
‘The Big Money Show’ co-hosts discuss buy now, pay later spending options and the impact it will now have on your credit score.
Small, everyday purchases like a meal from DoorDash are now able to be financed through eat now, pay later options — a practice that some experts deem “predatory.”
“You’ve got to have enough sense to not follow the urge to finance a taco, okay? You have got to be an adult,” career coach Ken Coleman told “The Big Money Show,” Wednesday.
“This is predatory, and it’s going to get a lot of people in deep trouble.”
RISKS OF BUY NOW, PAY LATER: ‘TICKET TO OVERSPENDING,’ EXPERT SAYS
DoorDash and Klarna are now partnering up to extend buy now, pay later options to consumers. (Reuters, Getty / Getty Images)
Financial wellness experts are continuously sounding the alarm to cash-strapped consumers, warning them of the devastating impact this financial strategy could have on their credit score as some lenders will begin reporting those loans to credit agencies.
Consumers may risk getting hit with late fees and interest rates, similar to credit cards.
“So your sandwich might show up on your FICO score, especially if you pay for it late,” FOX Business’ Jackie DeAngelis explained.
EXPERTS WARN HIDDEN RISKS OF BUY NOW, PAY LATER
Major players like Affirm, Afterpay, and Klarna have risen to prominence at a time when Americans continue to grapple with persisting inflation, high interest rates and student loan payments, which resumed in October 2023 after a pause due to the COVID-19 pandemic.
Ramsey Solutions personal finance expert and ‘The Ramsey Show’ co-host George Kamel discusses the ‘buy now, pay later’ craze and the trend that celebrates the financial benefits of being childless.
“The Big Money Show” co-host Taylor Riggs offered a different perspective, suggesting that company CEOs have a “duty” to attract as many customers as they want.
“Unfortunately for me, this always comes down to financial literacy — which I know is so much in your heart about training people to save now by later,” she told Coleman, who regularly offers financial advice to callers on “The Ramsey Show.”
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Coleman continued to come to the defense of financially “desperate” consumers, arguing that companies are targeting “immature” customers.
“I’m for American businesses being able to do whatever they want to do under the law. That’s fine. But let’s still call it what it is: it’s predatory, and they know who their customers are,” Coleman concluded, “And I’m telling you, they’re talking about weak-minded, immature, desperate people.”
FOX Business’ Daniella Genovese contributed to this report.
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