Retired business owner Doug McCormick, 80, recently listed his four-bed, 4.5-bath home near Denver for $1.3 million.<\/p>\n
After two months, three open houses, and a price drop to about $1.28 million, he still hasn\u2019t received a single offer.<\/p>\n
“I keep reminding myself you only need one buyer,\u201d he told the Associated Press. [1] Now, he\u2019s just waiting for that one buyer to show up.<\/p>\n
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McCormick\u2019s situation is increasingly common as home sellers across the country cut prices or offer incentives to attract buyers. For years, low inventory and soaring prices gave sellers the upper hand. But that’s quickly changing.<\/p>\n
Existing-home sales are coming off their slowest year since 1995, and activity so far this year remains \u201csluggish\u201d compared to last year\u2019s weak pace, reports the National Association of REALTORS\u00ae (NAR). [2]<\/p>\n
In January, the NAR reported that existing-home sales fell 0.7% last year to 4.06 million \u2014 the lowest level since 1995. [3] Slower sales mean a less frantic market. Homes are sitting longer, price cuts are more common, and buyers have more time and leverage to negotiate.<\/p>\n
For buyers, this shift follows years of rising home prices and skyrocketing mortgage rates. Now, the tide may finally be turning.<\/p>\n
“Homebuyers are in the best position in more than five years to find the right home and negotiate for a better price,\u201d said NAR Chief Economist Lawrence Yun. \u201cCurrent inventory is at its highest since May 2020, during the COVID lockdown.” [4]<\/p>\n
Another good sign for home buyers: mortgage rates are starting to ease. According to Dr. Jessica Lautz is the Deputy Chief Economist and Vice President of Research at NAR, the average 30-year fixed mortgage rate from Freddie Mac recently dropped to 6.50%, down from 6.56% in early September. [5]<\/p>\n
Lower rates boost buying power \u2014 but if rates fall further, more buyers could re-enter the market, potentially chipping away at that negotiating edge.<\/p>\n
Read more: Here are 5 simple ways to grow rich with real estate<\/a> \u2014 whether you have $10 or $100,000 to invest<\/strong><\/p>\n Buying a home still isn\u2019t \u201ceasy,\u201d but the market has shifted just enough to give first-timers more leverage. They can take their time, ask for concessions, and structure a deal that fits their budget. Here’s how to take advantage of this cooling period.<\/p>\n Story continues <\/p>\n Homes listed for 40 to 60+ days (especially after a price cut) usually indicate a motivated seller.<\/p>\n Ask your agent to pull the price history and confirm whether any previous deals had fallen through. These sellers may be more open to negotiations or offering concessions.<\/p>\n Cooler markets means sellers are more open to negotiation \u2014 and you can ask for more than just a lower price.<\/p>\n Talk to your agent about whether it makes sense to request concessions like closing costs credits, repair credits, or a home warranty.<\/p>\n Before making an offer, figure out the monthly payment you can comfortably afford \u2014 including taxes, insurance, and HOA fees \u2014 and work backward to set your price range.<\/p>\n Ask your lender to compare scenarios for a price reduction versus asking the seller-paid points (fees the seller pays to lower your interest rate). In some instances, points can reduce your monthly payment more than a price cut.<\/p>\n Yes, mortgage rates could fall further, but you can refinance later if they do. Waiting, however, can cut both ways: declining rates may pull more buyers into the market, reducing your bargaining power and re-heating certain metros.<\/p>\n If you find a home you like at a monthly payment you can comfortably afford, it may make sense to buy now rather than try to time the perfect rate.<\/p>\n Home sellers aren’t the ones feeling the squeeze from a cooling house market. Home builders are offering more incentives to attract buyers as well.<\/p>\n In August, 66% of builders reported offering incentives such as price discounts or mortgage rate buydowns, up from 62% in July, according to the National Association of Home Builders (NAHB)\/Wells Fargo Housing Market Index (HMI). [6] Consider whether buying a new-build makes more sense than buying an existing home.<\/p>\n Join 200,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/strong><\/p>\n At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate. We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines<\/a>.<\/p>\n [1]. The Associated Press<\/a> \u201cShortage of homebuyers forces many sellers to lower prices or walk away as sales slump drags on.\u201d<\/p>\n [2]. National Association of REALTORS\u00ae (NAR)<\/a> \u201cNAR Existing-Home Sales Report Shows 0.2% Decrease in August.\u201d<\/p>\n [3]. National Association of REALTORS\u00ae (NAR)<\/a> \u201cFlashback to 1995 in the Housing Market vs Today.\u201d<\/p>\n [4]. National Association of REALTORS\u00ae (NAR)<\/a> \u201cAs Inventory Rises, Home Buyers Are Seeing Opportunity.\u201d<\/p>\n