3 Housing Market Predictions for July

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What does the real estate market have in store for July? Read on to see what may happen. 

If you’ve been trying to buy a home this year, you may be growing increasingly frustrated by the day. Not only is it an expensive time to sign a mortgage, but it’s a tough time to find the right home due a glaring lack of inventory.

Things might improve slightly during the month of July, but only marginally so. Here are some predictions for July’s real estate market.

1. Mortgage rates will likely remain stuck in the 6% range

As of June 22, the average 30-year mortgage rate was 6.67%, according to Freddie Mac. Mortgage rates have fluctuated within the 6% range since the start of the year, so there’s no reason to expect any major changes come July.

Sure, we might see mortgage rates creep down a bit. Or they might come close to hitting 7%. But all told, it’s unlikely there will be major movement.

The good news there is that buyers really shouldn’t have to worry about a major uptick in borrowing rates. But the bad news is that they shouldn’t anticipate any discounts.

2. Housing inventory might rise slightly

U.S. real estate inventory actually grew in May compared to April, reports the National Association of Realtors (NAR). In May, total inventory rose to 1.08 million units, or the equivalent of a three-month supply of available homes.

Based on this pattern, we could see a mild uptick in inventory during the month of July. But it’s unlikely to be a notable one.

And even if housing inventory inches up to, say, a 3.2-month supply of homes, for context, it can take up to a six-month supply of homes to satisfy buyer demand in full. So unfortunately, buyers might continue to struggle from an inventory standpoint.

For sellers, however, low inventory is a good thing. When there’s not much competition, it can be much easier to find a buyer — and command a higher sale price.

3. Home prices might drop minimally

In May, the median existing-home price was $396,100, according to the NAR. That’s a 3.1% decline from the previous May. If that pattern continues, buyers could get a touch of relief — especially if mortgage rates happen to dip modestly at the same time.

But to be clear, buyers should not expect major discounts in the course of purchasing a home in July. And sellers don’t need to panic about home prices suddenly plunging. That’s unlikely to happen due to the fact that there’s still a nice amount of demand and inventory is still low.

Should you buy or sell a home in July?

July could, unfortunately, end up being a very difficult month to buy a home. That doesn’t mean you shouldn’t try. But you should be aware that you might end up spending more than you’d like and compromising on the home features you want due to a lack of inventory.

On the other hand, July should prove to be a pretty good time to sell a home. Of course, if you’re selling, you’ll need to keep today’s housing market conditions in mind. You’ll need a new place to live once your home sells, and you might struggle to find and afford one due to the issues mentioned above. But it could be a good time to sell and downsize, especially if you’re able to purchase your next home outright.

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