Many Americans have been anxiously waiting for the spring and summer to buy their homes. This time of year is what is known as the homebuying season.
However, this year buyers will be a in a particularly good position to make purchases for a variety of reasons. According to a report from Realtor.com, this homebuying season will be especially advantageous for buyers because inventory levels are up. The data showed that the number of homes for sale was up 3.1 percent in January when compared to the year before.
"January's start compared to year-ago levels is an encouraging sign of sellers' interest, particularly given the adverse conditions brought on by the polar vortex," said Errol Samuelson, president of Realtor.com. "We saw the tight-supply market of last fall carry all the way into November - later than is typically expected - and this early rise in inventory is a welcome trend. The sustained median list price growth supports the gains we saw last year, and sellers are responding with confidence in that consistency. We will continue to watch inventory movement in the coming months as we move further into typical seasonal patterns, but anticipate a more balanced buying market."
Where home prices increased at drastic levels in 2013, gains are expected to ease in the new year. The Realtor.com report predicts median existing home prices will only rise 5 to 6 percent in 2014.
More signs of a strong buying season
As home prices and values rose so much in 2013, many buyers were becoming discouraged by the seemingly unsustainable increases. However, the housing market is continuing to find a healthy balance and gains are moderating.
A separate report from Zillow showed that home values only rose 0.2 percent in January compared to the month before, marking the smallest monthly gain since May 2012. Zillow noted that this minor increase was likely due to more inventory opening up.
Zillow Chief Economist Stan Humphries said more inventory - primarily from homes being released from negative equity, price gains high enough to convince sellers to put their homes on the market and construction - is helping to moderate home value increases.
"As the market shakes off a long winter and gears up for the spring season, we should see buyers gaining a bit more leverage this year than they've had in the past, with more choice and less competition," Humphries said. "This slightly more balanced market is another step on the road back to normal, and will help offset the impact of rising mortgage rates and more expensive homes for buyers."
The report also showed that home values were up 6.3 percent in January on a year-over-year comparison. Zillow anticipates that values will rise another 3.4 percent from January 2014 to January 2015.
Potential buyers should be getting ready
Those interested in buying a home this spring and summer should be getting prepared now. With so much to consider when it comes to buying a home, it's critical to take all the necessary steps.
Potential buyers should be shoring up their bank accounts, saving as much money as possible and watching their credit. But aside from the obvious financial preparations, buyers will also need to take other steps to prepare, like tracking down a reputable home inspector.
A good home inspection company can make all the difference when assessing a property. Inspectors will provide a thorough report of more than 300 aspects of the home, helping a buyer know the home's state and any issues they might be facing after they purchase. Spring is on the horizon, so potential homebuyers should be getting ready now.