Inventory shortages have plagued markets across the country, but a new survey suggests a turnaround may soon begin to break for frustrated buyers who can’t find enough homes for sale.
Ten percent of homeowners say they plan to list their home for sale this year, and more than a quarter—26%—say they plan to list within the next three years, according to a new survey from realtor.com® of 657 potential home sellers conducted during the week of March 29.
The homeowners most likely to sell have homes valued below $350,000, which could help relieve inventory woes in a particularly tight price segment, the survey finds.
“In a typical year, we see about 8% of the nation’s homes hit the market, and we’re expecting about 25% more this year,” says George Ratiu, senior economist at realtor.com®. “This signals that many homeowners who were wary to list during the pandemic are getting ready to do so, and this much-needed inventory—especially for starter homes—will begin to relieve buyers’ challenges in a very competitive market.”
Many homeowners remain hesitant to sell because they fear they won’t find a new home within their price range, the survey shows. Homeowners also said they’re not selling because they aren’t sure where they want to move; the current economic climate; the logistics of buying and selling at the same time; and concerns about showing a home during the pandemic.
The majority of homeowners who say they plan to sell in the next two to three years said that they would be more likely to list their home sooner if they knew they could buy and sell perfectly, according to the realtor.com® survey. Also, 37% of homeowners with plans to sell said that if they knew they could make a lot of money on their home sale, that also would be a motivator to list sooner.
“With home prices at historic highs, now is a great time to sell a home and many first-time sellers might be surprised to learn how much equity they have,” says Rachel Stults, deputy editor for realtor.com®. “For consumers who are worried about the stress and planning involved, there are a number of resources available to help with everything—from perfectly timing buying and selling to removing the hassles of doing repairs and staging.”
Other factors that could prompt homeowners to sell sooner: having more affordable homes on the market (33%); not having to handle the logistics of buying and selling at the same time (29%); not having to prepare the home for sale (27%); and if the health risks from the COVID-19 pandemic were lower (24%).
Home buyers may feel even more of a rush to lock in mortgage rates trying to get ahead of any further increases. Over the last month, the 30-year fixed-rate mortgage has moved above its sub-3% ultra-low averages to jumping this week to a 3.17% average.
“During the course of the pandemic, ‘home’ has become more important than ever,” says Sam Khater, Freddie Mac’s chief economist. “As a result, strong purchase demand continues—but buyers also outnumber the sellers. Since January, mortgage rates have increased half a percentage point from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power. Unfortunately, this has disproportionately affected the low end of the market, where supply is the slimmest.”
Despite this week’s increase, rates still remain lower than a year earlier—when the pandemic had first hit the country. Also, expect mortgage rates to remain low near 3.3% in 2021, Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®, writes for the association’s Economists’ Outlook blog.
Freddie Mac reports the following national averages with mortgage rates for the week ending March 25:
Freddie Mac reports commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.
I recently had the good fortune to be interviewed by the Forth Worth Review online magazine, the premier source for news and information about Fort Worth, Texas. From business reviews to local news, they are a one-stop resource for everything you need to know about the area. They deliver their readers the latest tips about what’s going on in the city. You should check it out!
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I recently had the good fortune to be interviewed by Voyage Dallas magazine. Their main goal is to focus on and highlight small businesses and entrepreneurs in the Metroplex.They reached out to me and I was happy to answer their questions.
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Learning about mortgage loans, especially if you are a first time home buyer, can be a bit like trying to learn a foreign language. Things like LTV, PMI, PITI, FHA, VA, conventional, percentage rates, and points are all terms you will come across when trying to learn what is involved when applying for the right mortgage. Once you realise that you're ready to apply for a loan, which lender should you choose? That in itself is also tricky, especially if you haven't been referred to one. Some lenders specialize in low credit scores, some with FHA or VA loans. But most will be able to give you great advice on what is the most appropriate loan for you.
If you are interested in learning more about mortgage loans and the things to watch out for when choosing a mortgage lender. Check out this in-depth guide from Consumers Advocate: https://www.
Or give me a call or email me if you would like to discuss the process with me.
Let me know in the comments below what your experiences are and any other advice you would give to homebuyers.
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