A recent report from the National Association of Realtors states that housing inventory levels are at an all-time low in the first quarter of 2018. This inventory shortage is driving prices up as well. The average single-family home price is up 5.7% from the first quarter of 2017. This is a nationwide condition as 91% of the measured markets that NAR analyzes show price gains in the first quarter.
“The worsening inventory crunch through the first three months of the year inflicted even more upward pressure on home prices in a majority of markets,” NAR Chief Economist Lawrence Yun said. “Following the same trend over the last couple of years, a strengthening job market and income gains are not being met by meaningful sales gains because of unrelenting supply and affordability headwinds.”
“Realtors in areas with strong job markets report that consumer frustration is rising,” Yun said. “Home shoppers are increasingly struggling to find an affordable property to buy, and the prevalence of multiple bids is pushing prices further out of reach.”
These factors have caused the total number of housing sales to drop 1.7% from first quarter 2017. Even with the average median household income increased for the average American overall housing affordability has decreased due to rapidly rising home prices and mortgage rates.
“Prospective buyers in many markets are realizing that buying a home is becoming more expensive in 2018,” Yun said. “Rapid price gains and the quick hike in mortgage rates are essentially eliminating any meaningful gains buyers may be seeing from the combination of improving wage growth and larger paychecks following this year’s tax cuts.”
“It’s simple: homebuilders need to start constructing more single-family homes and condominiums to overcome the rampant supply shortages that are hampering affordability,” he said.
Looking to buy a home in this market? You need to be sure you have all of your “ducks” in a row! If you’re not sure or need a guide give one of our experience lakeshore Realtors a call.
Looking to sell in this market? This is an unprecedented time to sell a home be sure you are not underselling! We would love to give you a comparative market analysis on your home that takes into account all of the current economic factors so you know exactly what your home is worth.
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