As we look at America’s current US housing market and the influences on its value, one dominant feature is often overlooked: the number of homes for sale right now.
The tight supply of residential properties since we first encountered the pandemic has been a significant reason why property prices have defied predictions of fast-falling values.
Many dynamics are at play that do not speak to a firm trend, which is the principal reason why owners are delaying their decision to either upgrade or downsize.
For example, while prices have held firm since the onset of Covid, we’ve just started to witness an easing down, dipping in February for the first time in 11 years.
The median price for existing homes was down 0.2% to $363,000, according to the National Association of Realtors (NAR). That ends a 131-week streak of positive year-on-year results.
Total home sales have experienced their largest monthly increase since July 2020. They jumped 14.5% from January to February.
This result ends a 12-month streak of decline in sales, yet the number of homes being sold is still 22.6% off the number this time last year, according to NAR.
If these two survey results seem counter-intuitive, consider the fact that they’ve been achieved as mortgage rates rose 3% year-on-year to March.
It’s no wonder folks are confused!
The best way to unravel this story is to talk to a trusted agent about the trends in your own backyard. Your neighborhood real estate scene is very unlikely to mirror national averages precisely.
Getting the local picture from your agent is essential in your decision-making process.
Here are some helpful trend data and predictions from various sources to round out the picture.
- Mortgage costs have been tracking down in recent weeks, settling at around 6.8%, according to Freddie Mac.
- Mortgage Bankers Association says the slight decline in rate trends, attributed to our competitive banking sector, “has helped to improve buyers’ purchasing power”.
- Some 70% of homeowners still have a mortgage rate of 4% or less, says market intelligence firm ATTOM Data.
- NAR chief economist Lawrence Yun has been quoted as saying, “Inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties.”
- Housing starts were up 9.8% in February, reports the US Census Bureau and US Department of Housing and Urban Development (HUD).