Inventory levels for available housing have decreased for the past couple of years yet recent findings from the National Association of Realtors’ “Housing Opportunities and Market Survey” (HOME) has shown that an increasing number of homeowners feel that now is a good time to sell. With information found in these reports we can hope that more homeowners will decide to sell and improve the current lack of available homes for sale.
In particular, the increasing trend in the HOME survey of those feeling now is a good time to sell has 71% of homeowners feeling this way. This is an increase from last quarter at 69% and substantially over last year at 61%.
Lawrence Yun, NAR chief economist, says it’s apparent there’s a mismatch between homeowners’ confidence in selling and actually following through and listing their home for sale. “There are just not enough homeowners deciding to sell because they’re either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy,” he said. “As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth.” Added Yun, “Perhaps this notable uptick in seller confidence will translate to more added inventory later this year. Low housing turnover is one of the roots of the ongoing supply and affordability problems plaguing many markets.”
Confidence among renters has decreased with only 52% of them feeling now is a good time to buy. This is down from 56% in Q1 of this year and 62% from a year ago. The rising home prices coupled with the tight inventory have made it hard for renters to get into the home buying market.
“It should come as little surprise that the confidence reading among renters has fallen every month since January (64.8) and currently sits at its lowest level (53.8) since tracking began in March 2015 (65.7),” said Yun. “Paying more in rent each year and seeing home prices outpace their incomes is discouraging, and it’s unfortunately pushing home ownership further away — especially for those living in expensive metro areas on the East and West Coast.”
Home sales have been continuing this year regardless the inventory challenges. The economic confidence has been healthy enough to power demand this year. With homeowners feeling now is a great time to sell we can hope that inventory levels will increase towards a more “normal” market.