Housing inventory has decreased over the past couple of years, but recent findings shared by the National Association of Realtors’ “Housing Opportunities and Market Survey” (HOME) has indicated that an increasing number of homeowners think that now is a good time to sell. This increasing trend in the HOME survey has 71% of homeowners feeling this way. This is up 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.”
In the world of renting, confidence has declined with only 52% of renters feeling that now is a good time to buy. This is a decrease from 56% in the first quarter of this year and 62% from last year. The rising prices along with the inventory challenges have made it difficult 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.”
Overall home sales have been continuing at a strong pace this year despite the inventory challenges. The economy has been powering demand and if homeowners are thinking that now is a good time to sell then we can hope that inventory levels will increase towards a more “normal” market.