Demand for Homes to Buy Continues to Climb

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Across the United States, there is a severe mismatch between the low number of houses for sale and the high demand for those houses! First-time homebuyers are out in force and are being met with a highly competitive summer real estate market.

According to the National Association of Realtors (NAR), the inventory of homes for sale “has fallen year-over-year for 36 consecutive months,” and now stands at a 4.1-month supply. A 6-month supply of inventory is necessary for a balanced market and has not been seen since August of 2012.

NAR’s Chief Economist Lawrence Yun had this to say,

“Inventory coming onto the market during this year’s spring buying season – as evidenced again by last month’s weak reading – was not even close to being enough to satisfy demand.

That is why home prices keep outpacing incomes and listings are going under contract in less than a month – and much faster – in many parts of the country.”

Is There Any Relief Coming?

According to the CoreLogic’s 2018 Consumer Housing Sentiment Study, four times as many renters are considering buying homes in the next 12 months than homeowners who are planning to sell, “which is the crux of the available housing-supply imbalance.”

Demand for Homes to Buy Continues to Climb | MyKCM

As more and more renters realize the benefits of homeownership, the demand for housing will continue to rise.

Do homeowners realize demand is so high? With home prices rising across the country, homeowners gained over a trillion dollars in equity over the last 12 months, with the average homeowner gaining over $16,000!

The map below shows the breakdown by state:

Demand for Homes to Buy Continues to Climb | MyKCM

Many homeowners who have not thought about listing their homes may not even realize how much equity they have gained, or the opportunity available to them in today’s market!

Bottom Line

If you are one of the many homeowners across the country who hasn’t quite found their forever home, now may be a great time to list your house for sale and find your dream home!

First-Time Home Buyers Continue to Put Down Less Than 6%!

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According to the Realtors Confidence Index from the National Association of Realtors, 61% of first-time homebuyers purchased their homes with down payments below 6% in 2017.

Many potential homebuyers believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying, but in March, 71% of first-time buyers and 54% of all buyers put less than 20% down.

Ralph McLaughlin, Chief Economist and Founder of Veritas Urbis Economics, recently shed light on why buyer demand has remained strong,

“The fact that we now have four consecutive quarters where owner households increased while renters households fell is a strong sign households are making the switch from renting to buying.

Households under 35 – which represent the largest potential pool of new homeowners in the U.S. – have shown some of the largest gains. While they only make up a third of all homebuyers, the steady uptick in their homeownership rate over the past year suggests their enormous purchasing power may be finally coming to [the] housing market.”

It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes.

Bottom Line

If you are one of the many first-time buyers unsure of whether or not they would qualify for a low-down payment mortgage, let’s get together and set you on your path to homeownership! I am currently working with a couple who only had to put down 3% to buy their first home. We can do this together. Call Linda at 407-925-7721.