Home prices are rising and inventory is low. We still need a roof over our heads.
Americans know this is a bad year to buy a home, but it’s not stopping them.
Real estate company RE/MAX says home sales have increased more than two percent since last year. But 62 percent of Americans say those buyers will regret their purchase, according to a poll from down payment insurance provider ValueInsured.
“Housing confidence — as do home prices — goes up and down, but what’s noteworthy now is the decline among homeowners,” says ValueInsured CEO Joe Melendez. “Many are stuck in homes they have outgrown and cannot upgrade, which explains the inventory shortage we see at the starter-home level.”
Despite low confidence, home sales continue to rise along with prices — meaning more people are buying expensive homes.
Home prices and sales soar
Right now is homebuying season. April through July usually accounts for 40 percent of home sales in the U.S., according to personal finance site smartasset. But there isn’t much to shop through.
The typical home price reached $243,000 this April. That’s the second highest noted by RE/MAX, behind June 2017. But June is historically the month where home prices reach their highest during the year, leaving real estate experts to predict prices will surpass that record this summer.
“We’re already seeing some impressive prices moving up in markets throughout the U.S.,” says RE/MAX CEO Adam Contos. “As we head into summer, we’ll watch several housing markers like home starts, mortgage applications and sales price to gauge the effect they’ll have on inventory across the country — the good news is that the rate of sales helps accommodate a shrinking inventory and buyers can still find opportunities.”
Low inventory, quicker sales
This April, the average amount of time homes were on the market was only 52 days, five days shorter than the year before. Low inventory is a trend in the housing market right now. It took 81 days to sell homes whose price is between the highest and lowest last year, according to a study from Zillow. That was nine days less than the year before. And June was the month where homes sold fastest, clocked at 73 days.
The speed at which buyers need to bid is at record highs — and it’s driving home costs up.
“As we head into spring and the traditional season when sales heat up, buyers will find that desirable homes won’t be on the market for long,” says Nationwide VP David Berson. “Today, the average home is on the market almost half the length of time that it was six years ago.”
Not interested in buying or selling
As Debt.com has previously reported: Homes Are in Demand, But Nobody Is Selling. Housing inventory is down 10 percent since last year, according to a Zillow study. And homes are on the market half the amount of time that they were in 2012, the same year the housing market began to improve from the real estate bubble, according to CNN.
“Average days on the market across the country are extraordinarily low, especially in certain hot markets,” Berson says. “When you factor in the nationwide trend of rapidly increasing prices, it’s going to be a more difficult market for homebuyers this year.”
“Flat to declining home sales volume indicates sellers and buyers are not exactly jumping in with both feet,” Melendez says. “More of them could be moved off the sidelines if perceived security and confidence in homebuying could be restored.”
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Article last modified on June 18, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Americans Have No Choice But To Buy Expensive Homes - AMP.