39% of People Think It's Still a Seller's Market. Here's How to Cope as a Buyer

It's more than fair to say that 2023 has, at least so far, not been an easy year to buy a home. Not only have mortgage rates been elevated, but housing inventory has been low across the board.

In fact, as of the end of April, there was only a 2.9-month supply of available homes nationally, according to the National Association of Realtors. It can often take a six-month supply of homes to meet buyer demand in full, so clearly, a 2.9-month supply is far from ideal. It's not surprising, then, to learn that 39% of people think today's real estate market favors sellers, according to recent data from Bank of America.

The less housing inventory there is, the more sellers can get away with commanding higher prices for their homes. And also, limited inventory tends to lead to bidding wars, which can drive home prices up. That benefits sellers, but clearly, not buyers.

If you're struggling to buy a home, you're most likely in good company. Here are some ways to cope with a housing market that sorely lacks inventory.

1. Get pre-approved for a mortgage

A mortgage pre-approval letter won't necessarily help you avoid a bidding war. But it could help you win one.

A pre-approval letter sends the message to sellers that you're a serious buyer whose finances have already been looked at by a mortgage lender. If you're duking it out with a few other buyers for the same home and you're the only one with a pre-approval letter in hand, the seller might choose you if your offer is as competitive as the others.

2. Know when to walk away from a bidding war

You may be inclined to put up a fight for a home you really love that you can see yourself being happy in. But there comes a point when it's best to walk away from a bidding war. If you don't, you might end up paying a lot more than the home in question is worth.

Before you even begin to engage in a bidding war, turn to your real estate agent (assuming you're working with one) for advice. Ask them what the home you're after is really worth and let that guide your offer strategy.

And also, think about your budget. It's one thing to bid $550,000 on a home that's initially listed for $500,000 if you can afford up to $600,000. But if $535,000 is the top end of your budget, be prepared to back out of a bidding war that has you spending more.

3. Set priorities for your dream home

You may want a house on a large lot with four bedrooms, a two-car garage, an updated kitchen, and a finished basement for extra living space. But if most of the homes for sale in your target neighborhood don't seem to be offering all of those features, figure out which are most important to you and focus on those in the course of your search.

When real estate inventory is low, your chances of getting everything you want as a buyer are lower. Accept that and focus instead on the features that are truly worth going after.

It might still be a seller's market today, but that doesn't mean you're doomed as a buyer. Follow these tips to increase your chances of winning a bidding war and finding the right place to buy. At the same time, be mindful of your budget so you don't go over it, and know when a home is no longer worth bidding on.