Is Now a Good Time to Buy a House? [June 2023 Data] (2024)

Homebuyer.com data analysis indicates that, for first-time home buyers, June 2023 is a good time to buy a house relative to later in the year.

This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment. We highlight why69 percentof renters would buy a home if their lease ended this month.

We also made an accompanying video on our YouTube channel titled,Is Now A Good Time To Buy A Home? Shown below, we discuss:

1. Mortgage rates are falling after the Debt Ceiling agreement
2. First-time home buyer programs are still available
3. Home buyers outnumber home sellers
4. Home sellers are getting more greedy

Let’s talk about why now is a good time for first-time buyers to buy a house.

Today’s Mortgage Rates Are Falling

The first reason why June 2023 is an excellent time to buy a house is that mortgage rates are falling back into the 6s and are likely to hold.

According toFreddie Mac, 30-year fixed-rate mortgage rates averaged 6.57 percent to open the month, and dropped 0.375 percentage points when Congress reached a budget deal. When mortgage rates drop, it’s easier to buy your first home and stay within budget.

Rates should remain lower throughout the month, too.

On June 14, 2023, the Federal Reserve is expected to pause its streak of Fed Funds Rate hikes after ten consecutive increases dating to last year. Raising the Fed Funds Rate combats inflation. The central banker’s pause would suggest inflation is near its end.

Inflation is the enemy of low mortgage rates.

Althoughthe Federal Reserve doesn’t control mortgage rates, a pause would lead rates down. Rates are also down on lingering concerns with U.S. banks.

Turmoil at Silicon Valley Bank, Signature Bank, First Republic Bank, and others led Wall Street to move money away from risky bets toward lower-risk holdings, such as mortgage-backed bonds. When the quantity of demand for mortgage bonds climbs, fixed-rate and adjustable-rate mortgage rates fall.

For first-time buyers, interest rates go even lower.

First-Time Home Buyer Discount Programs

Another reason June is a good time to buy a house is that mortgage rates are discounted for eligible first-time buyers, and new mortgage programs reduce fees for buyers who make alow down payment.

The mortgage rate discount is part of Fannie Mae and Freddie Mac’sFirst-Time Home Buyer Mortgage Rate Discount program. The program automatically lowers mortgage rates for low- to moderate-income buyers in all 50 states, regardless of credit score or down payment size.

The program applies to all conventional mortgage loans, including:

• The 3% down payment programHomeReady
• The 3% down payment programHome Possible
• The 3% down payment programConventional 97
• Fannie Mae HomePath
• All other fixed- and adjustable-rate mortgage loans

Fannie Mae and Freddie Mac also introduced a reduced fee structure for buyers who don’t qualify under the discount mentioned above program.

The new fee structure favors home buyers with smaller-sized down payments and average- or lower-range credit scores.

Get your expected mortgage rate here.

Other government agencies are making homes more affordable, too

The Federal Housing Administration recently reduced its annual mortgage insurance premiums (FHA MIP) by 0.30 percentage points for buyers, lowering monthly payments on FHA-backed loans $300 per year per $100,000 borrowed.

The FHA mortgage insurance premium reduction is the agency’s first time lowering FHA MIP since 2015.

Home Buyers Outnumber Home Sellers

The third reason why June 2023 is a good time for first-time buyers is that the current shortage of homes for sale is expected to exacerbate.

According to theNational Association of REALTORS®and its most recent Existing Home Sales report:

• Each state averages fewer than 20,000 homes for sale
• 75 percent of homes now sell within a month
• The typical home sells a quarter faster as compared to the month prior

Meanwhile, corroborating data fromAltos Researchshows that sales are climbing faster than available inventory.

We are in a seller’s housing market.

At the current sales pace, buyers would acquire every MLS-listed home for sale by Labor Day. New construction homes are more abundant but also scarce.

The supply of new homes is down 2.5 months since last fall.

When demand for homes exceeds supply, prices rise. Therefore, buyers should expect higher home prices between now and next season and into next year. Right now is the best time to buy homes at lower prices.

Home Sellers Are Testing Their Pricing Power

The fourth reason why June 2023 is a good time to buy your first home is that the psychology of home sellers is shifting. Here’s what we mean.

Buying or selling a home is an emotional transaction. Two primary emotions – fear and greed – drive buyer and seller decisions.

In a housing market with declining home prices or a weak U.S. economy, home sellers might feel fearful and reduce their asking price more quickly to avoid losing a sale.

Conversely, in an upward-trending market, feelings of greed emerge, challenging a buyers’ ability to get a good deal.

Recently, home sellers have grown more confident.

First, Altos Research data reveals that new home listing prices are increasing faster than the median sales price of all homes, which suggests a rise in seller greed. Next, fewer sellers are reducing prices compared to prior years – another showcase of seller confidence.

And finally, today’s home sellers now offer fewer concessions, leaving home buyers with fewerways to lower their interest rate.

However, it’s a finding from Fannie Mae’s monthly sentiment report that highlights how quickly market expectations changed. For the first time in eight months, U.S. consumers project home prices will be higher a year from now which means that the window for a good deal in housing is nearly closed.

Buyers who act quickly will get access to the best homes and prices. Later in 2023, home affordability will be worse.

Click to get your mortgage pre-approved now.

You Can Buy A Home Without A Big Down Payment

You don’t need a big down payment to buy your first home.

First-time buyers can achieve their American Dream of homeownership without a 20 percent down payment.

If you want to buy as soon as possible for any of these reasons, start a pre-approval:

• Your lease is ending, and your landlord won’t renew
• You’removing out of your parent’s home
• You’re ready tobuy a pet-friendly home

There are over a dozenlow- and no-downpayment mortgagesfor first-time buyers, and local housing offices offer eligible buyers access todown payment assistanceprograms.

You may even get discounts and deals based on your profession.

There are specialmortgages for nurses, for example, andmortgages for teachers. There are mortgages for first responders, firefighters, and law enforcement.

In some cases, you can buy a home with a $100 downpayment.

Furthermore, mortgage lenders lowered credit score requirements on government-backed loans to make qualifying more accessible and fair. Congress passed a law that changed howmedical debt and credit scoreswork.

The typical home buyer received a 22-point FICO boost.

Affordable housing billscan also help, including home buyer tax credits, down payment assistance, and cash grants.

This video reviews 14 first-time home buyer programs.

What To Do Next: Get Pre-Approved To Buy Your Home

If you plan to buy a home in the coming weeks or months, get amortgage pre-approvalfirst.

Mortgage pre-approvals are a dress rehearsal for your home purchase. They use today’s live mortgage rates and market conditions to show how much home you can afford to buy while setting realistic boundaries for your home search and budget.

Every successful purchase starts with a pre-approval, and buyers should get one as early in their home search as possible.

Also:give your credit score a boost.

Ask for a copy of your credit report and review it for errors. Supplement your monthly bill-paying with a credit-building servicesuch as StellarFithat can work in as few as 30 days.

Every extra point can help.

Third, use the HUD website to research down payment assistance programs in your area. Some programs may have been discontinued or defunded in the new year, so call the local provider to verify availability.