Higher mortgage rates create affordability challenges for homebuyers. But affordability is not the only part of the buying experience. The number of homes available, the competition for those homes and the willingness of sellers to negotiate also matter.
When a housing market cools, some of the pressure buyers face can ease. That can mean more homes to consider, fewer bidding wars and more room to keep important protections in an offer.
Those opportunities do not erase the challenges of buying a home. They do give you a useful way to evaluate your options, especially if a previous search left you frustrated or repeatedly outbid.
The research cited below describes the cooling period covered in the original article. These figures are historical examples, not a statement about conditions in your neighborhood. Use the three trends as a framework for questions to ask during your own search.
1. More Homes to Choose From
During the pandemic, housing supply reached a record low while buyer demand skyrocketed. There simply were not enough homes available to meet that demand, making it difficult for buyers to find a home.
As the market cooled, the supply of homes for sale increased. Calculated Risk reported a 39.5% increase in available homes compared with the same week a year earlier in the weekly comparison cited in the original article.
That increase did not mean supply had returned to normal. The market described was still a sellers’ market, and the number of available homes remained below more normal levels. Even so, buyers had more homes to choose from than before.
What More Choice Means for Your Search
More options can make finding a home that fits your needs a little less difficult. Instead of treating every listing as your only chance, you can approach the search with a clearer picture of what you want.
Start by separating your priorities into a short list:
- Must-haves: The features you are not willing to give up.
- Preferences: The things you would like but can live without.
- Reasons to pass: The issues that would make a home the wrong fit for you.
Use that list when reviewing homes with your real estate agent. Ask whether the available selection gives you enough suitable choices, rather than focusing only on whether the total number of listings has increased.
The practical takeaway is simple: more inventory is helpful, but keep your search centered on your needs and budget. Do not let a larger selection talk you into a home you do not actually want.
2. Bidding Wars Can Ease
Frequent, intense bidding wars were a defining part of the pandemic-era housing frenzy. Buyers who searched during that period may have experienced the frustration of losing out on several homes.
As more options became available, competition eased. The National Association of Realtors, or NAR, reported that the average number of offers on recently sold homes declined. In the monthly comparison cited in the original article, the average fell from 3.7 offers per sale to 2.5 offers per sale compared with the same month a year earlier.
That decline illustrates the difference between a highly competitive search and one with less pressure from other buyers. It does not mean competition disappeared, but buyers were no longer facing the same intensity described during the peak frenzy.
Revisit the Search Without Repeating Old Assumptions
If you were outbid before, it is understandable to expect another difficult experience. Still, a past search does not have to be the template for your next one.
Before deciding how to approach an offer, ask your agent:
- What competition are we seeing for the homes I am considering?
- Are we preparing for multiple offers, or assuming they will happen?
- What offer terms would I feel comfortable accepting?
Keep the conversation focused on the homes you are actually considering. The historical decline in offers is useful context, but it should not substitute for a discussion of your own search.
Less competition can create an opportunity to try again. Treat that as permission to explore your options, not pressure to buy before you are ready.
3. Buyers Can Have More Negotiating Power
When buyers face less competition, they also have more negotiating power. That matters not only for the offer itself, but for important steps in the homebuying process.
During the most competitive period described in the original article, more buyers were willing to waive appraisal or inspection contingencies to try to win a bidding war. NAR data cited in that article later showed the percentage of buyers waiving those contingencies was declining.
The appraisal and inspection provide important information about a home’s value and condition. Keeping those steps in the conversation matters, even when you are excited about a property.
Make Room for the Inspection Conversation
The realtor.com survey cited in the original article also found that more sellers were accepting offers with contingencies. In that report, 95% of sellers said buyers requested a home inspection, and 67% negotiated with buyers on repairs because of inspection findings.
Those findings show that inspections and repair negotiations were part of many transactions in the survey. When an inspection turns up an issue, reduced competition can give a buyer more room to renegotiate with the seller.
Before making an offer, discuss which contingencies you want to include. If the inspection identifies concerns, review the findings with your agent and decide what you want to request.
Do not assume a seller will agree to every request. The useful shift is having more room for the conversation, not a guaranteed result.
Put the Three Trends in Perspective
More inventory, fewer competing offers and greater negotiating room can make the buying process less intense. Higher mortgage rates can still make affordability challenging. Both things can be true at the same time.
If your last search stalled because you could not find a home or kept getting outbid, consider taking a fresh look. Start with your budget, update your must-have list and ask your agent about selection, competition and contingencies.
Then reach out to Ed Parcaut to talk through your mortgage questions and the next steps in your homebuying plan. The goal is not to rush back into the market. It is to decide whether the options in front of you fit your needs.
