Fewer Agents Say It's a Seller's Market. It May Be Time for Home Buyers to Pounce

Things may finally be cooling off.

Ever since the second half of 2020, it's been a tough time to be a home buyer. The housing market has sorely lacked inventory since the latter part of 2020, and that's given sellers a huge advantage. As such, home prices have been sky-high for the past couple of years, making it difficult for buyers to take the leap into homeownership.

But it looks like things are changing. In fact, in a recent HomeLight survey, only 51% of real estate agents say it's a seller's market, whereas previously, 90% felt that way. And so if you've been looking to buy a home, you may want to gear up to move forward in the near term.

Why sellers are losing their edge

Although housing inventory has picked up this year, there still aren't enough available homes on the real estate market to meet buyer demand. At the same time, though, buyers are increasingly starting to pull out of the market and say no to sky-high listing prices.

Mortgage rates have risen sharply since the beginning of 2022. That's been driving some buyers away, and understandably so. There's also the fear of an impending recession to consider. For months, financial experts have been sounding warnings about a near-term economic slowdown.

Buying a home is a huge undertaking even in the best of financial times. But during a downturn, it can be a scary notion. So we can bet that recession fears are also helping cool the market.

All told, the obvious edge sellers once had in the housing market may finally be waning. If you've been looking to buy, you may want to plan on making an offer during the tail end of 2022 or the start of 2023.

How to put yourself in the strongest position to buy a home

If you're interested in buying a home in the near term, there are a few key steps worth taking ASAP. First, check your credit report to make sure there aren't any major red flags, and check your credit score to see what it looks like. You don't want to get stuck in a situation where you don't qualify for a mortgage or for an affordable rate on one.

At the same time, work on boosting your down payment funds to give yourself more options for buying a home. Property prices are still up on a national level (though they've been dropping in certain markets), so the more money you have socked away for a down payment, the more homes you can explore.

Finally, crunch your own numbers to see what mortgage you can afford. As a general rule, your housing costs, including your mortgage payments, property taxes, and homeowners insurance, should not exceed 30% of your take-home pay. If you want to give yourself an added cushion, limit that expense to 20% or 25% of your income so you have more room to cover expenses like maintenance, repairs, and higher utility bills.

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The fact that sellers may be losing their edge is a good thing for buyers. If you've been waiting patiently for an opportunity to make an offer on a home, you may get it soon -- so make sure you're ready.