People are always going to buy homes no matter the conditions of the market but this year we are seeing a strong sellers’ market because of three main factors. There is less inventory than this time last spring, the prices of homes have risen and mortgage rates have gone up.
There are multiple reasons why inventory is low but the main factor is that people are staying in their homes longer. “Existing home inventory fell to an all-time low at the end February” National Association of Realtors said in their report.
The population of the country steadily growing will always affect the housing market. One issue that increases the pricing of homes is the lack of real estate in the hottest markets. Only so many homes can be built in a certain city and the population growing, leads to a strong sellers’ market.
Last but not least is mortgage rates going up. This always puts pressure on the home buyer to move a bit faster when buying a home but the rates are still historically low compared to ten years ago. Historically when Mortgage rates go up, the prices of homes normally go down, but the lack of inventory has slowed this trend down so far this spring.
These qualities will not stop people from buying homes this year but the seller will have a lot more leverage compared to previous years. The increase in seller’s powers at the negation table has made it common to see multiple offers coming in on homes over asking price so far this year.