The Producer Price Index rose 0.7% in August, up from 0.4% in July, according to a report released by the US Department of Labour on Thursday, and despite market concerns, some market experts are still predicting that the Federal Reserve will not raise interest rates next week.
Hannah Jones, economic analyst at Realtor.com®, analysed: With core inflation and employment both showing signs of cooling, the market expects the Fed to hold rates steady at next week's meeting as the committee aims to ease the economy back to health without overshooting.
If the Fed leaves rates unchanged next week, this could be good news for property.
If incoming data continues to meet market expectations, then the real estate market can look forward to stability, allowing buyers and sellers to plan more effectively for the future, Jones added.
With the autumn home-buying season upon us, we'll explain in our latest edition of "How's the housing market this week?" explaining what the latest real estate statistics mean for home buyers and sellers.
In addition to optimistic predictions about the Federal Reserve's next move, autumn tends to be a favourable season for home buyers.
While today's real estate market is certainly challenging, autumn typically ushers in more favourable home-buying conditions compared to other seasons of the year, says Jones.
But so far, at least, those homebuyer-friendly conditions seem to be moving slowly, especially when it comes to affordability.
The median home price hovered at $435,000 in August. That's only 0.7 per cent lower than last August, which means home prices seem to remain more or less stable from year to year.
With the transition from summer to autumn, home prices have fallen below this year's peak but are still hovering around last year's levels, Jones said.
For the most recent week ending 9 September, the median list price was up 0.6 per cent compared to the same week last year. The reason for the inflated prices? There just aren't enough homes for sale.
Where are all the houses going?
Active inventory officially fell to a three-month low in the week ending 9 September. Buyers looking for new listings have 7.1 percent fewer options than they did a year ago. The same can be said for the overall inventory of new and existing listings, which fell 5.1 percent.
High mortgage rates are once again to blame for the lack of inventory, as sellers feel "locked in" to the current low interest rate mortgages on their homes.
One workaround that desperate homebuyers have been exploring is new construction. In fact, more and more builders are willing to offer deals, such as lower rates than buyers might get on the open market.
But buyers beware: those few sellers willing to list their homes for sale are facing one of the slowest market periods in history. This presents a significant opportunity for buyers who are paying attention to the market.
Jones explains, "As the busy market slows down over the summer, buyers may see less competition and relatively more homes than they have in the past few months." Active inventory continues to lag behind last year's levels, but is improving."
In fact, the Realtor.com Economics Team has identified the best week to buy a home in 2023: 1-7 October. Historical data shows that homebuyers can save more than $15,000 on median home prices this week compared to the beginning of the year, as new listings sold at a rate of 18.9 percent this week.
Homebuyers won't be shy about making an offer if they find a great home at an affordable price. The average time it took to sell a home in the week ending 9 September was unchanged from the same week last year, but the pace of sales may be accelerating.
As the market continues to work through the 2022 housing slowdown, homes are likely to sell faster in the coming weeks than they did a year ago, despite lower levels of demand, Jones said.
