Housing Market Adding Homes Faster Than They’re Selling
Homes are being added to the market faster than they’re being sold. Buyers and sellers alike will find the numbers encouraging.
Home sales rose at an annualized rate of over five percent in March, showing signs that the housing market is rebounding nicely after a February that showed declines.
Compared to last year, homes are selling at a higher pace with growth in sales coming from all four regions of the country.
But homes were added to the market at an even quicker pace.
This is good news for buyers who have a pre-approval in hand, but are finding it difficult to find a home to buy due to low inventory.
With spring weather in full swing, buyers will be heading out to find homes so they can complete a move during the summer months.
Home prices and the number of sales are expected to keep rising in the coming months. Buyers who find a home they like will want to act quickly and should request pre-approvals and rate quotes now.
More Housing Steadily Becoming Available
Homes are being sold quickly, but it shouldn’t discourage home buyers from searching for a new home.
For the last few months, new homes on the market have been hard to come by. But March saw an almost six percent increase in home inventory.
That trend is expected to continue as spring is traditionally a popular time for sellers to enter the market.
There are now nearly two million existing homes available for sale, just below year ago levels. However, the unsold inventory represents a 4.5 month home supply, up from 4.4 in February.
This stat imagines that if every home were to be sold with no additional homes becoming available, it would take 4.5 months for every home to be sold. While the statistic is improbable, it gives great insight on the current housing supply. The higher the number, the better for home buyers.
This upward movement should continue, and may approach the six-month benchmark that realtors like to see in a healthy housing environment.
Currently, the housing market is full of aggressive buyers. In March, 42 percent of homes sold were on the market for less than 30 days, the fastest pace since July 2015.
As more properties come on the market, buyers will have more options and won’t be forced to make aggressive offers.
Home Prices Still on the Rise
The Existing-Home Sales report from The National Association of Realtors (NAR) annualizes 12-month sales figures to reveal the number of existing homes sold per month. An existing home, as opposed to a new-construction home, is one in which someone previously resided.
The report also includes changes in home prices. In March, the median existing-home price was $222,700, up from 2015’s $210,700. That marks 49 consecutive months of year-over-year increases.
The tighter inventory is likely responsible for the continued increase in home prices.
While sellers may have the upper hand in a tight market, buyers can still reap the benefits of low-interest rates on home loans.
According to Freddie Mac, the 30-year fixed rate is at 3.59%, just 1 basis point (0.01%) higher than its three-year low.
This bodes well for both buyers and sellers to close home sales quickly, and if more inventory comes into play, it could be quite the busy season.
Preparing for Home Buying Season
For buyers who wish to seriously enter the market, be sure to begin the pre-approval process for a home loan. This will illustrate that you’re ready and able to move forward with a home purchase, which will give you at a competitive advantage in a tight housing market.
You’ll also have a more solid idea of your price range so your realtor can show you homes that match your specifications.