Are you wondering if it’s a good time to buy a house right now? You’ve probably heard that the real estate market is slowing down, so does it mean we are in a buyer’s market and it’s a good time to buy your dream home? Are you worried that mortgage interest rates will continue rising- should you buy now to lock in your interest rate or wait for home prices to drop some more? One way to tell if it’s a good time to buy a house right now is to look at the available months supply of homes in the market.
Are we in a Buyer’s Market or Seller’s Market right now?
According to Redfin’s December 2022 data, there is a 2.3 months supply of homes nationwide right now. This means we are in a seller’s market right now. Months of supply is a common metric used by real estate professionals to gauge whether a market is in a buyer’s market or seller’s market. It is calculated by taking the total number of homes for sale divided by the number of homes sold in one month. A balanced market would be a 5 to 6 months supply of homes and a buyer’s market will be greater than 6 months supply of homes in the market. The best time to buy a house is when it’s a buyer’s market. A buyer’s market is when there is a lot of inventory of homes for sale but not enough buyers out there wanting to buy a home.
Is it a Good Time to Buy a House Right Now?
Since we are currently in a seller’s market, is it still a good time to buy a house? If you are just basing your decision on the fact that we are in a seller’s market and that mortgage interest rates are high right now, then, it’s not a good time to buy a house right now. However, if you look at historical months supply of homes data, you will see that the trend for the months supply of homes is slowly increasing (see graph below). In December 2021, there was only 1.1 months supply of homes, and in December 2020, there was only 1.3 months supply of homes. Let’s compare this metric to the pre-covid pandemic market, in December 2019, there was a 2.5 months supply of homes, in December 2018, there was a 3.2 months supply of homes and in December 2017 there was a 2.6 months supply of homes. For the past 6 years, we’ve been in a seller’s market! So if you are going to wait for the real estate market to change to a buyer’s market, who knows how many years you’ll have to wait!
Where Is it a Good Time to Buy a House Right Now?
It’s not wise to base your decision on whether or not to buy a house solely on the fact that nationally we are in a seller’s market. You need to look at the local inventory and home sales data of where you live. It’s a good time to buy a home if you live in a place where it’s a buyer’s market or a balanced market. If you live in a place where it’s a buyer’s market, that means home prices will be lower and you will have the upper hand when it comes to price negotiations.
It’s also a good time to buy a house when you are in a balanced market because there is enough inventory of homes for sale for the number of interested buyers. In a balanced market, you may not have the upper hand when it comes to negotiating home prices but at least you are not going on bidding wars every time you make an offer.
It’s a Good Time to Buy a Home in Miami Metro Area
Miami, FL metro area is in a balanced market with 5.8 months supply of homes. It’s a good time to buy a home in Miami, FL metro area.
It’s Still a Seller’s Market in Major Metro Areas in the US
As you can see below, it’s still a seller’s market in the major metro areas in the United States. Boston, Minneapolis, Baltimore, Cincinnati, San Diego, San Francisco, St. Louis, and Seattle have the tightest real estate markets right now with less than 2 months supply of homes. Miami is the only metro area that is close to being in the buyer’s market with 5.8 months supply of homes. New York metro area is close to being in a balanced market with 4.5 months supply of homes.
If you are a buyer in these major metro areas, it makes sense to wait a few months for more homes to come on the market since winter is when inventory is low. March is when sellers start listing their homes for sale, that’s when you get an influx of new home listings.
New York, NY metro area
New York, NY metro area is in a seller’s market (almost a balanced market) with 4.5 months supply of homes. Compare this to last year when New York metro area was solidly in a seller’s market with 2.9 months supply of homes.
Philadelphia, PA metro area
Philadelphia, PA metro area is in a seller’s market with 3.5 months supply of homes.
Phoenix, AZ metro area
Phoenix, AZ metro area is in a seller’s market with 3.4 months supply of homes.
Austin, TX metro area
Austin, TX metro area is in a seller’s market with 3.1 months supply of homes.
Houston, TX metro area
Houston, TX metro area is in a seller’s market with 3.1 months supply of homes.
Pittsburgh, PA metro area
Pittsburgh, PA metro area is in a seller’s market with 3.1 months supply of homes.
Chicago, IL metro area
Chicago, IL metro area is in a seller’s market with 2.9 months supply of homes.
Los Angeles, CA metro area
Los Angeles, CA metro area is in a seller’s market with 2.8 months supply of homes.
Atlanta, GA metro area
Atlanta, GA metro area is in a seller’s market with 2.7 months supply of homes.
Detroit, MI metro area
Detroit, MI metro area is in a seller’s market with 2.7 months supply of homes.
Tampa, FL metro area
Tampa, FL metro area is in a seller’s market with 2.6 months supply of homes.
Orlando, FL metro area
Orlando, FL metro area is in a seller’s market with 2.5 months supply of homes.
Charlotte, NC metro area
Charlotte, NC metro area is in a seller’s market with 2.4 months supply of homes.
Washington, DC metro area
Washington, DC metro area is in a seller’s market with 2 months supply of homes.
Minneapolis, MN metro area
Minneapolis, MN metro area is in a seller’s market with 1.9 months supply of homes.
Baltimore, MD metro area
Baltimore, MD metro area is in a seller’s market with 1.8 months supply of homes.
Cincinnati, OH metro area
Cincinnati, OH metro area is in a seller’s market with 1.8 months supply of homes.
San Diego, CA metro area
San Diego, CA metro area is in a seller’s market with 1.8 months supply of homes.
San Francisco, CA metro area
San Francisco, CA metro area is in a seller’s market with 1.8 months supply of homes.
St. Louis, MO metro area
St. Louis, MO metro area is in a seller’s market with 1.7 months supply of homes.
Seattle, WA metro area
Seattle, WA metro area is in a seller’s market with 1.6 months supply of homes.
Boston, MA metro area
Boston, MA metro area is in a seller’s market with 1.2 months supply of homes.
Source: December 2022 real estate data from RedFin.
Check out: 40 Places in The US Where Homes are Still Selling Fast
State by State: Is it a Good Time to Buy a House?
Is Now a Good Time to Buy a House in the US? (Or Wait)
Is Now a Good Time to Buy a House in North Carolina? (Or Wait)
Is Now a Good Time to Buy a House in Maryland? (or wait?)
Is Now a Good Time to Buy a House in PA? (Where to Buy)
Is Now a Good Time to Buy a House in NJ?
Is Now a Good Time to Buy a House in New York? (Where to Buy)
Is Now a Good Time to Buy a House in CT? (Where to Buy)
Is Now a Good Time to Buy a House in Virginia? (Or Wait?)
Is Now a Good Time to Buy a House in South Carolina? (Or Wait)
Is Now a Good Time to Buy a House in Georgia? (Or Wait?)
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