If you have been on Realtor.com or GRAR.com recently you may have noticed that there are not many homes listed for sale and those that are…are only listed for a few days and then they are gone. This is what is called a “sellers market”. This happens when there are more buyers than there are houses on the market. When it is a sellers market the homes tend to get offers higher than the asking price.
The surging residential real estate market of the last two years led to record-high home prices and record-low inventory. This simultaneous “double trouble” has made it increasingly difficult for consumers to achieve homeownership, according to a new analysis from the National Association of Realtors® and Realtor.com®.
The Double Trouble of the Housing Market report examines the impact that rapidly escalating home prices and diminishing housing inventory has on housing affordability. Unlike previous affordability research and indices, NAR and Realtor.com® considered affordability for all income groups, accounted for the affordability of homes currently available for sale instead of homes that have already sold and provided affordability data by race for the 100 largest U.S. metro areas.
The total home valuation across the country is estimated to have risen by $8.1 trillion from the first quarter of 2020 through the end of 2021. However, this sizable increase in real estate values was not accompanied by a rise in homeownership as the ownership rate remained at approximately 65%.
“The housing wealth gain has been sizable over the past two years,” said NAR Chief Economist Lawrence Yun. “However, due to the ongoing inventory shortage and rising interest rates, homeownership attainment will become especially challenging unless drastically more housing supply is available.”
“In general, an increase in salary makes housing more affordable to a buyer. But due to the reductions in inventory over the last few years, today’s buyers in large tech markets can actually afford a smaller number of homes than they could two years ago, despite an uptick in wages,” said Realtor.com® Chief Economist Danielle Hale.
To increase the nation’s housing inventory, NAR is advocating that all levels of government include funding for affordable housing construction; preserve, expand and create tax incentives to renovate distressed properties; convert unused commercial space to residential units; and encourage and incentivize zoning reform. Moreover, expanding new-home construction by an additional 550,000 units a year for 10 years would create 2.8 million new jobs and generate more than $400 billion in economic activity.
For more information on listing or buying a home, contact Eagleview Realty to speak with one of our knowledgeable agents.