Low Inventory Causes Home Prices To Maintain Fast Growth

Dated: 11/06/2017

Views: 625

Image title

The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price Report last week. The report revealed that severely lacking inventory across the country drained sales growth and kept home prices rising at a steady clip in nearly all metro areas. Home prices rose 5.3% over the last quarter across all metros.

Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

“Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had to outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

What this means to sellers

Rising prices are a homeowner’s best friend. As reported by the Washington Post in a recent articlepost:

“The rise in median sales prices has made current homeowners much more willing to sell their home, and that willingness is one of the main drivers behind the inventory that does make it on to the market. While it hasn’t been enough to meet demand, it has made the situation much better, compared with even three or four years ago.”

What this means to buyers

In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year or next year. However, as Construction Divereported, the amount of cash needed to purchase that home will also increase.

“These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

Bottom Line 

If you’re thinking of selling and moving down, waiting might make sense. If you are a first-time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

Blog author image

Gillian Cunningham

Gillian Cunningham’s name is synonymous with true professionalism, extraordinary knowledge, exceptional customer service, strong work ethic and high integrity standards. Gillian’s personal approac....

Want to Advertise on this Site?

Latest Blog Posts

Getting Mortgage Ready

The Home Buyer's Guide to Getting Mortgage ReadyDon’t wait until you’re ready to move to start preparing financially to buy a home. If you’re like the vast majority of home buyers, you will

Read More

Mar 20 2018 35371 1

Are You Aware of How Much Equity You Have in Your Home? You May Be Surprised! Tuesday March 20th, 2018  For Sellers, Move-Up BuyersCoreLogic’s latest Equity Report

Read More

How To Prepare For A Successful Open House

There are mountains of resources available that give you a million different ways to prepare your home for a successful open house. It can be overwhelming looking at these lists and narrow down

Read More

Dont Forget To Spring Forward Sunday March 11

Be sure to advance your clocks by 1 hour tonight.    It's also a great time to change your air filters and check your smoke alarm batteries.  ;

Read More