IDAHO — A nationwide slowdown in home sales could give Treasure Valley buyers more time, options and negotiating power, even as elevated mortgage rates and home prices continue to challenge affordability.
Sales of previously occupied U.S. homes fell 2% from July to August, reaching a seasonally adjusted annual rate of 3.98 million, according to the National Association of Realtors. That was the slowest annual sales pace in more than a year and the third consecutive monthly decline.
Tara Heinz, owner of Lion’s Den Real Estate, said the Treasure Valley market has also cooled from the buying frenzy seen during the COVID-19 pandemic. However, she considers the change a return to a healthier, more balanced market.
“In the COVID times and the pandemic times, it was a rat race,” Heinz said. “Everybody was trying to get a house. They were overpaying. They were making emotional decisions, acting really fast because there weren’t enough options to appease the demand.”
WATCH | Local experts explain what the changing market could mean for Treasure Valley buyers—
Heinz said an increase in available homes is giving buyers more time to compare properties and make informed decisions. Homes that are not priced appropriately may remain on the market longer, creating opportunities for buyers to negotiate.
“A couple of years ago, like I mentioned, the pandemic times, there was very little to no negotiating,” Heinz said. “Sellers were getting more than they were asking. Now they’re having to really, really think about coming down in price, helping pay for lower rates or making significant repairs.”
Nationally, there were 1.62 million unsold homes on the market at the end of August, according to the National Association of Realtors. That represented a 4.9-month supply at the current sales pace — the highest level in more than 10 years. A four- to six-month supply is typically considered a balanced market.
More negotiating power, however, does not necessarily make buying a home affordable.
The national median existing-home sales price rose 1.6% from a year earlier to $429,100 in August, according to the National Association of Realtors. Meanwhile, the average rate on a 30-year fixed mortgage reached 6.76%, its highest level in more than 14 months, according to Freddie Mac.
Mortgage broker Alejandro Lorenzana said buyers should look beyond the headline interest rate and focus on whether they can comfortably afford the monthly payment.
“The two questions that I typically ask people to get them away from the rate talk is: Can you afford this new payment comfortably?” Lorenzana said. “Can you afford it, and will this purchase increase the quality of life for your family?”
Options such as temporary or permanent mortgage rate buydowns can lower a buyer’s interest rate and monthly payment, Lorenzana said, but they can require additional money upfront.
Both experts said buying a home is not the right decision for everyone. A potential buyer should consider their finances, long-term plans, and whether the monthly payment would remain affordable if mortgage rates do not fall soon.
They said they hope rates begin to stabilize, which could give buyers more certainty about what they can afford.
