Americans want to buy homes, but they're disappearing
The steady decline in U.S. interest rates helped the housing sector recover from its malaise in early 2019, and the momentum is continuing so far in 2020.
Yes but: Prospective homeowners are finding it increasingly difficult to find a home, as the lower rates have brought on increased selling prices and fewer available homes.
Driving the news: National housing inventory fell by nearly 14% in January — the steepest year-over-year decline in more than four years, according to a survey released this morning from Realtor.com.
- The supply of homes for sale in the U.S. is now at its lowest level since Realtor.com started tracking the data in 2012.
- The company also notes that there is a supply shortage at every price tier, but especially in entry-level homes. The number of properties priced under $200,000 fell by 19% year over year.
What's happening: As mortgage rates decline, applications are spiking and so are prices.
- The 30-year fixed rate for a mortgage fell to an average of 3.71% this week, its lowest level since October, the Mortgage Bankers Association reported Wednesday.
- The refinance rate jumped by 15% to the highest level since June 2013, MBA said. Compared with a year earlier, it was up 183%.
- Conversely, MBA's purchase index fell by 10% because of the challenge buyers had finding homes they could afford.
- National home prices increased 4% year over year in December and are forecast to increase by 5.2% from December 2019 to December 2020, according to the latest report from CoreLogic released Tuesday.
What they're saying: “With fewer homes coming up for sale, we’ve hit another new low of for sale-listings in January,” Realtor.com chief economist Danielle Hale said.
- “This is a challenging sign for the large numbers of millennial and Gen Z buyers coming into the housing market.”