Today’s housing market favors sellers, but many in that group are reluctant to put their home on the market for fear of not being able to find a replacement property in time, according to Redfin, which surveyed more than 800 of its real estate agents on the topic last month.
Nearly two-thirds (65.6%) of agents surveyed said low inventory was the biggest challenge facing sellers in their markets.
Half of agents said buyers in their markets were putting less than 20% down on home purchases and, as HousingWire noted, that might not be a bad thing. Lenders are facing more scrutiny and so are less likely to offer a loan they won’t be able to approve. Sellers, too, are less likely to accept offers with smaller down payments.
Homebuying activity continues to face resistance in the form of tight supply and high home prices. That’s not expected to change in the near term, though some projections call for a tapering in home prices this year, indicating that the right kind of inventory might be coming online to meet demand.
The market had a 3.8-month supply of existing homes in February, according to the latest figures from the National Association of Realtors. New home inventory was slightly more robust during the month, at 5.4 months, per the most recent data from the Commerce Department. A six-month supply is considered healthy.
There is a well-documented shortage of starter and trade-up homes, two housing categories in most need of an inventory infusion to help spur the homebuying activity necessary for full housing recovery. Builders, citing lot development and skilled-labor hiring costs as headwinds, are taking on the charge of creating more of the former, with recent moves by national and regional companies to market smaller-scale, lower-maintenance properties to first-time buyers, particularly in the southern U.S.
For millennials who were able to buy early, however, the rising prices that have been prohibitive for their peers are helping them borrow against the value of the equity in their home for remodeling and other projects, CNBC reported.
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