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Author: Seth Pfaehler

Are More Homes Coming onto the Market?

An important factor shaping today’s market is the number of homes for sale. And, if you’re considering whether or not to list your house, that’s one of the biggest advantages you have right now. When housing inventory is this low, your house will stand out, especially if it’s priced right.

But there are some early signs that more listings are coming. According to the latest data, new listings (homeowners who just put their house up for sale) are trending up. Here’s a look at why this is noteworthy and what it may mean for you.

More Homes Are Coming onto the Market than Usual

It’s well known that the busiest time in the housing market each year is the spring buying season. That’s why there’s a predictable increase in the volume of newly listed homes throughout the first half of the year. Sellers are anticipating this and ramping up for the months when buyers are most active. But, as the school year kicks off and as the holidays approach, the market cools. It’s what’s expected.

But here’s what’s surprising. Based on the latest data from Realtor.com, there’s an increase in the number of sellers listing their houses later this year than usual. A peak this late in the year isn’t typical. You can see both the normal seasonal trend and the unusual August in the graph below:As Realtor.com explains:

“While inventory continues to be in short supply, August witnessed an unusual uptick in newly listed homes compared to July, hopefully signaling a return in seller activity heading toward the fall season . . .”

While this is only one month of data, it’s unusual enough to note. It’s still too early to say for sure if this trend will continue, but it’s something you’ll want to stay ahead of if it does.

What This Means for You

If you’ve been putting off selling your house, now may be the sweet spot to make your move. That’s because, if this trend continues, you’ll have more competition the longer you wait. And if your neighbor puts their house up for sale too, it means you may have to share buyers’ attention with that other homeowner. If you sell now, you can beat your neighbors to the punch.

But, even with more homes coming onto the market, the market is still well below normal supply levels. And, that inventory deficit isn’t going to be reversed overnight. The graph below helps put this into context, so you can see the opportunity you still have now:

Bottom Line

Even though inventory is still low, you don’t want to wait for more competition to pop up in your neighborhood. You still have an incredible opportunity if you sell your house today. Connect with a real estate agent to explore the benefits of selling now before more homes come to the market.

Plenty of Buyers Are Still Active Today [INFOGRAPHIC]

Some Highlights

  • Holding off on selling your house because you believe there aren’t any buyers out there?
  • Data shows buyers are still active, even with higher mortgage rates. This goes to show, people still want to buy homes, and those who can are moving now.
  • Don’t delay your plan to sell for fear no one is buying. The opposite is true and buyer traffic is still strong today. Connect with a real estate agent to get your house in front of these buyers.

Why Is Housing Inventory So Low?

One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.

There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.

Underbuilding Is a Long-Standing Problem

One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below shows new construction for single-family homes over the past five decades, including the long-term average for housing units completed:

For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while new home construction is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight. 

Today’s Mortgage Rates Create a Lock-In Effect

There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps illustrate just how many homeowners may find themselves in this situation:

Those homeowners need to remember their needs may matter just as much as the financial aspects of their move.

Misinformation in the Media Is Creating Unnecessary Fear

Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction. 

How This Impacts You

If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.

  • For buyers: A limited number of homes for sale means you’ll want to seriously consider all of your options, including various areas and housing types. A skilled professional will help you explore all of what’s available and find the home that best fits your needs. They can even coach you through casting a broader net if you need to expand your search.
  • For sellers: Today’s low inventory actually offers incredible benefits because your house will stand out. A real estate agent can walk you through why it’s especially worthwhile to sell with these conditions. And since many sellers are also buyers, that agent is also an essential resource to help you stay up to date on the latest homes available for sale in your area so you can find your next dream home. 

Bottom Line

The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, connect with a real estate agent. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in your area.

Should Baby Boomers Buy or Rent After Selling Their Houses?

Are you a baby boomer who’s lived in your current house for a long time and you’re ready for a change? If you’re thinking about selling your house, you have a lot to consider. Will you move to a different state or stay nearby? Is it time to downsize or do you want more space to accommodate your loved ones? But maybe the biggest consideration boils down to this – will you buy your next home or choose to rent instead?

That decision ultimately depends on your current situation and your future plans. Here are two important factors to help you decide what’s right for you.

Expect Rents to Keep Going Up

The graph below uses data from the Census to show how rents have been climbing steadily since 1988:Rents have been going up consistently over the long run. If you choose to rent, there’s a risk your rental payment will go up each time you renew your lease. Having a higher rental expense may not be something you want to deal with every year.

When you buy a home with a fixed-rate mortgage, it helps stabilize your monthly housing payment. This allows you to lock in your monthly payment for the duration of your home loan. That keeps your payments steady and predictable for the long haul. Freddie Mac sums it up like this:

“. . . homeowners with fixed-rate loans will see little to no change to their monthly housing cost over the life of their loan. You can be confident in knowing that your mortgage payments won’t change much in the long term, even when life’s other costs do.”

Owning Your Home Comes with Unique Benefits

According to AARP, buying your next home is a better long-term strategy than renting:

“Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”

To help you choose what you’ll do after you sell, here are just a few of the benefits of homeownership that article covers:

  • Owning your home can help you save money for the future. Your home, and the equity you build as a homeowner, can provide generational wealth that could be passed on to loved ones, giving them a better life.
  • You might not have to pay a monthly mortgage payment at all. If you have enough equity to buy your next home outright, you wouldn’t have a monthly mortgage payment. While you might still need to cover property taxes or maintenance fees, not having to worry about a monthly mortgage payment could be a big relief.
  • Aging in place can be simpler. If your needs change, owning your home gives you the freedom to make renovations and updates that can make everyday life easier.

Bottom Line

If you’re a baby boomer who’s wondering whether you should buy or rent your next home, talk to a reliable real estate agent for advice. With rents going up and homeownership providing so many benefits, it may make sense to consider buying your next home.

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