Housing Inventory at Highest Level in 4 Years — Is Now the Time To Buy a Home?

There is finally some good news for homebuyers : Housing inventory has reached its highest level since May 2020, according to Realtor.com . This supply increase translated into the number of homes actively for sale growing by 35.8% in August.

Previously, low inventory — which was due to several factors, such as owners who felt “locked in” by lower mortgages they secured a few years back — has been placing huge pressure on home prices. Now, these too might ease. Yet, does this mean now is the time to buy a home?

According to Realtor.com ‘s senior economist Ralph McLaughlin, these higher inventory levels should help homebuyers in several different ways.

“First, it provides more choice to buyers and will better allow them to find homes that match their preferences, both in terms of home characteristics as well as location,” he said. In addition, more inventory typically means market speed slows down, so buyers don’t need to be as rushed as they have been in the recent past, he noted. Finally, rising inventory means buyers have more wiggle room with price as sellers become more accustomed to reducing their listing prices to attract more buyers.

Here’s a look at whether experts think now is the right time to buy a home .

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Time To Get Back in The Game

Some experts said that the “stars are beginning to align” for homebuyers for the first time in many years.

“Inventory has continued to rise, pricing has spent the last two years coming down and now interest rates are falling,” said Jared Blumberg, licensed real estate salesperson and co-founder of the Werner Blumberg Team at Compass New York City.

Indeed, in addition to increased inventory, mortgage rates are also decreasing. As of Sept. 12, the 30-year mortgage rate dropped to 6.2%, its lowest level since February 2023, according to Freddie Mac. In turn, Blumberg said that if you have been on the sidelines and wanting to buy over the last few years it is time to get back in the game, as now is a “really good window to purchase.”

“I am telling all my clients to get out there and get aggressive on buying great real estate before this window closes,” he said. “Great windows to buy and sell never last long, and you do not want to look back and regret not acting sooner.”

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Other Advice Says Wait and See

Now, other experts argued that while these conditions seem to form the perfect storm for buyers, they shouldn’t get too excited as the pent-up demand might make prices tick up again.

“Remember when we were all anticipating the floodgates to open once inventory freed up?” said Pete Evering, business development manager, Utopia Management . “This might be the start of it, and it might be good news for buyers.”

Evering added, however, that while falling rates and increased inventory will cause an initial drop in home prices, he fears there will be a rebound once potential buyers who have been holding off on a purchase for years reenter the market.

“The market has been too slow for too long, and there is potentially a lot of pent-up demand that will rock the system in no time,” he said. “What happens in the next few months is crucial, so the best recourse for most is to wait and see.”

There is one caveat, however: if you already have your sights on an ideal property that is well within your budget, he suggests acting on it right now before anything drastic happens.

Another factor that could also increase competition and push prices up due to an influx of buyers: further falling mortgage rates. This might also mean it’s better to hold off on a home purchase.

“Mortgage rates are declining and will likely decline more by the end of the year, so it may also be worthwhile to wait just a little bit before buying,” said Seamus Nally, CEO, TurboTenant .

Now’s the Time — If Your Finances and Personal Conditions Align

Sure, housing inventory is going up, but some experts said that this increase doesn’t always stabilize prices or cause them to drop. What’s more, while there are more choices for buyers, not all inventory is equal.

This is also reflected in Realtor.com’s report, as the cities which saw the most inventory growth in August were Tampa (90.1%), San Diego (80.4%) and Orlando (76.9%). Meanwhile, for instance, Dallas-Fort Worth-Arlington, Texas, saw an increase of “only” 50.6%.

The regional disparities are also of note, as in August, listings increased 46% in the South, 35.7% in the West, 23.8% in the Midwest and just 15.1% in the Northeast, according to the report.

Of note too is that while inventory this August improved, it’s still not at the pre-pandemic levels.

“There’s a saying in the real estate industry: ‘The best time to buy was 20 years ago, the next-best time is today,'” said Mike Golab, realtor, investor, DashHouseBuyers.com . “I always add, ‘If your finances and plans align with it.'”

According to Golab, ultimately, buyers need to consider their long-term plans, financial preparedness and current interest rates.

“The decision to buy should be based on whether the available properties match their goals for the future and their financial outlook,” he added.

This article originally appeared on GOBankingRates.com : Housing Inventory at Highest Level in 4 Years — Is Now the Time To Buy a Home?