Where's the Housing Inventory

Where is the Housing Inventory?

 

Supply and Demand

  1. the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.
    “by the law of supply and demand the cost of real estate will plummet”

The National Association of Realtors (NAR) released their latest Existing Home Sales Report this week.

Amidst reporting on the fact that sales of existing homes rose 1.2% from January 2015, and outpaced year-over-year figures for the fifth consecutive month, was the news that total unsold housing inventory is at 4.6-month supply.

This is down 0.5% from last February and remains below the 6 months that is needed for a historically normal market.

Consumer confidence is at the highest level in over a decade. Pair that with interest rates still under 4%, new loan programs available for down payments as low as 3%, and you have an attractive market for buyers.

Buyer demand for housing remains twice as high as this time last year.

Prices Rising

February marked the 36th consecutive month of year-over-year price gains as the median price of existing homes sold rose to $202,600 (up 7.5% from 2014).

So What Does This Mean?

The chart below shows the impact that inventory levels have on home prices.

HOUSING INVENTORY IMPACT

NAR’s Chief Economist, Lawrence Yun gave some insight into the correlation:

“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices. Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before (interest) rates rise.”

Bottom Line

If you are debating putting your home on the market this year, now may be the time.  The number of buyers ready and willing to make a purchase is at the highest level in years. Contact a local professional in your area to get the process started.

 

Mykel Martin

Hello I’m Mykel, the Agent behind At Home in the Inland Empire and the creator of most of the content on this website. I’d like to take a minute to Thank You for taking time to read this article. I truly appreciate the time you spend here. I look forward to your comments. Please feel free to share this article with someone you think might benefit from it.  If there is a topic you don’t find here that you’d like for me to address, feel free to Contact Me. I’m always open to suggestions and ideas from our readers.

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