The biggest challenge the housing market’s facing is how few homes there are for sale Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply:
“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy ”
Let’s break down these two big issues in today’s housing market.
Rate-LockedHomeowners
According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):
Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low across the country. But as homeowners explore all their options, we should expect more homes to come to the market.
When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory However, experts project mortgage rates will gradually fall this year, and that could mean more people will be willing to move as that happens
The other factor holding back potential sellers is the fear of not finding another home to buy if they move Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns.
These two issues are keeping the supply of homes for sale lower than pre-pandemic levels But if you want to sell your house, today’s market is a sweet spot that can work to your advantage You may have the option of leveraging your current home equity According to ATTOM:
Source:FHFA
But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.
“ . . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values ”
This could make a major difference when you move. Learn how putting your equity to work can keep the cost of your next home down.
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Here is a sneak peek of the newest and most admired ceramic styles to be discovered throughout the show floor at Coverings 2023 in Orlando, Fla.
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When every surface begs to be touched and experienced, that is when you know a space has been designed with intention. Ceramic tiles are the perfect material when a room or project needs to elevate every element in perfect harmony. This trend is experienced in many types of tiled settings that beckon the senses and create a desire to experience the space to its fullest, often giving rise to a feeling of relaxation or even excitement, depending upon the chosen application and essence of design
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Our Designers will create 3-5 initial designs based on your color preferences, then work with you online to create more designs until you find the one you love.
