Real estate continues to be called the ‘bright spot’ in the current economy, but there’s one thing that may hold the housing market back from achieving its full potential this year: the lack of homes for sale.
Buyers are actively searching for and purchasing homes, looking to capitalize on today’s historically low interest rates, but there just aren’t enough houses for sale to meet that growing need. Sam Khater, Chief Economist at Freddie Mac, explains:
“Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery…These low rates have ignited robust purchase demand activity…However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity.”
According to the National Association of Realtors (NAR), right now, unsold inventory sits at a 3.1-month supply at the current sales pace. To have a balanced market where there are enough homes for sale to meet buyer demand, the market needs inventory for 6 months.
Today, we’re nowhere near where that number needs to be. If the trend continues, it will get even harder to find homes to purchase this fall, and that may slow down potential buyers.
“The overall lack of sustained new listings growth could put a dent in fall home sales despite high interest from home shoppers, because new listings are key to home sales.” says Danielle Hale, Chief Economist at realtor.com
The realtor.com Weekly Recovery Report keeps an eye on the number of listings coming into the market (houses available for sale) and the total number of listings staying in the market compared to the previous year (See graph below).
Buyers are clearly scooping up homes faster than they’re being put up for sale. The number of total listings continues to decline even as new listings are coming to the market.
Does this mean it’s a good time to sell?
Yes. If you’re thinking about selling your house, this fall is a great time to make it happen. There are plenty of buyers looking for homes to purchase because they want to take advantage of low interest rates. Realtors are also reporting an average of three offers per house and an increase in bidding wars, meaning the demand is there and the opportunity to sell for the most favorable terms is in your favor as a seller.
When it’s time to take your home to active market, Tiffany Johannes’ years of experience have taught her the inestimable value of following a strategic plan that works. If you’re considering selling your house, this is the perfect time to connect and learn how you can benefit from the market trends in your local area.
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