With mortgage rates at or near record lows and prices rolled back to where they were a decade ago, this summer would seem an ideal time for first-time buyers to finally take the plunge. The problem is there aren’t a lot of starter homes on which to bid.
An inventory shortage has whipped up a feeding frenzy in some housing markets, with bidding wars and price increases. Is this pressure justified? Would most buyers be better served by waiting?
In this installment of Buying Advice, we’ll look at what’s driving the shortage and how that picture is likely to change in the months ahead. Where does “Act now!” make sense, and where should buyers sit it out awhile?
Housing market snapshot: Just how low have mortgage rates plunged? In the week that ended July 26, the average rate on a 30-year fixed-rate loan was 3.49%, according to Freddie Mac survey data. Sound low? It should. The rate on that same loan was an average of 4.55% last July.
As previously mentioned, tight housing supply helped constrain home sales in June. U.S. existing-home sales declined to 4.37 million in June, down 5.4% from 4.62 million in May. However, that pace is still 4.5% higher than the 4.18 million sold in June of last year.
“Despite the frictions related to obtaining mortgages, buyer interest remains solid,” says Lawrence Yun, the NAR’s chief economist. “But inventory continues to shrink, and that is limiting buying opportunities. That in turn is pushing up prices in many markets,” as is a reduced supply of lower-priced distressed listings. Prices increased the most in the West – 13.3% year over year – due to short supply of affordable and mid-tier homes. Here in Springfield and in our surrounding communities our inventory is still looking good but as we get closer to school starting we may see a drop in listings.
About Us: With homes in Springfield MO, Ozark MO, Nixa MO and surrounding southwest Missouri areas, Murney Associates produces more real estate sales in Springfield and Southwest Missouri than any other real estate firm. Murney Associates is the largest independent real estate company in Springfield Missouri and is ranked in the Top 100 in the nation by Real Estate Magazine. We are locally owned yet nationally recognized for our award-winning real estate performance.
We have the largest number of realtors in Springfield MO than any other real estate firm. And with commercial real estate in Springfield MO and surrounding areas, Murney Commercial Realtors can also help you find your next business location.
We can facilitate a stress-free move for you and your family to any of the homes in Springfield and its surroundings areas. Murney wants to exceed your expectations, because our clients always come first!