In this article, HousingWire details a recent report from real estate tracking firm, First American, that indicates a significant drop in inventory in the housing market from April to May of 2021. The report states that total inventory across the United States fell by 11,000 year-over-year and is now at its lowest level since the pre-pandemic years.
The selling of single-family homes has continued to increase as buyers flock to the housing market. Despite the decrease in inventory, the annual pace of home sales increased 3.2%. The current number of single-family homes being listed (1.815 million) is roughly 4.2% lower compared to May of 2020. The report states that the demand is disproportionately larger than the current supply.
The drop in inventory is the result of more buyers than sellers. Despite current mortgage rates being at historic lows, buyers are outstripping inventory almost four-to-one, creating a highly competitive market for housing. First American Senior Economist Odeta Kushi said, “As the competition increases, buyers are increasingly turning to riskier mortgages products — like adjustable-rate mortgages — and strategically finding creative ways to make their offer stand out.”
Many of the households purchasing new homes are first-time homebuyers, according to first American. Home values have also been on the rise with the median home sale price set at $320,000 for May 2021. According to Kushi, “Rising values further distorted the market, creating a wealth-effect for the millions of homeowners participating in the market, either as buyers or sellers.”
In conclusion, the demand for housing is outweighing the current supply, resulting in a decrease of 11,000 homes in the housing market compared to the same time last year. However, the rate at which homes are being bought continues to increase and the median home sale price is set at $320,000. For first-time homebuyers, they are finding creative ways to make their offers stand out and are participating more in the market.
You can read this full article at: https://www.housingwire.com/articles/housing-market-tracker-inventory-drops-by-11000/(subscription required)
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