The number of available homes remains low, especially during what would normally be a busy spring selling season.
Source: Altos Research
Looking ahead, there’s no flood of new homes that could significantly ease the housing crunch. Homeowners have little incentive to move, since doing so would mean giving up the comfortably low mortgage rates that guarantee them relatively low mortgage payments at a fixed rate.
Low mortgage rates and a surge in remote work have propelled competition in the housing market to new heights.
Source: NAR
In March 2020, $300,000 could have gotten you a roughly 2,000-square-foot home, according to data on average prices per square foot from Realtor.com. Today, that same dollar amount would get you a 1,400-square-foot property. A trifecta of challenges — higher borrowing rates, fewer transactions, and a historic lack of homes available for sale.
Mortgage Rates Continue to Rise
The U.S. economy is showing continued resilience which, combined with debt ceiling concerns, led to higher mortgage rates this week. Dampened affordability remains an issue for interested homebuyers and homeowners seem unwilling to lose their low rate and put their home on the market. If this predicament continues to limit supply, it could open up an opportunity for builders to help address the country’s housing shortage.
