Is there a contridiction in the housing market?
The start of the year ushered in a wave of good news about a hot stock market, higher wages and an active home sales environment. At the same time, housing prices have continued to rise, and the low inventory situation and affordability crunch has been particularly hard on first-time buyers struggling to get into the market. Nevertheless, buyer activity is easily outpacing seller activity in much of the country, culminating in relatively quick sales and low supply. Demand definitely remained strong this month.
New Listings were down 4.2 percent to 544.
Pending Sales increased 18.8 percent to 411.
Inventory shrank 6.5 percent to 2,193 units.
Prices were still soft as Median Sales Price was down 3.4 percent to $280,000.
Days on Market increased 14.2 percent to 169 days.
Months Supply of Inventory was down 10.4 percent to 6.0 months, indicating that demand increased relative to supply.
Unemployment has reached pre-recession levels, and Americans remain optimistic about finding quality employment.
This matters because job growth and higher paychecks fuel home purchases. Unfortunately, that won’t matter for potential buyers if price appreciation outpaces income growth and if mortgage rates continue their upward trend. Sellers are getting a generous number of offers in this market. The worry for sellers then becomes that there will not be a generous number of homes to choose from when they become buyers.