Our real estate market continued the trend of extremely low inventory recording 1,919 active listings, down an amazing 42% from a year ago at 2,777. Inventory levels of over 5,000+ homes for sale were relatively common in our recent memory. The average days on market increased by one day to 20. The typical seasonal pattern of fewer homes listed and fewer homes purchased over the holiday period may continue the very low inventory trend into 2022. With various Covid19 relief measures such as rental eviction, forbearance and various direct financial aid to individuals and business waning as well as potential Federal Reserve policy changes there is much to consider for the forthcoming marketplace.
If you’re in a looking to sell a vacant or investment property you’re in great position. If you are selling and looking to purchase your choice of replacement properties is extremely low and if you have a contingency on the sale your offer typically isn't as attractive as a cash or non-contingent offer. Our team can be of assistance! We are ready to discuss how your needs and our services could be a good match. Start a conversation with us today.
The housing market will likely remain hot, even as mortgage rates and home prices continue to rise, say economists at the government-sponsored enterprises Fannie Mae and Freddie Mac, who remain bullish on housing’s outlook.
The GSEs predict continued high levels of homebuyer demand and growth in purchase originations in 2022.
“Despite some obvious headwinds, the housing market remains strong as the economy grows,” Sam Khater, Freddie Mac’s chief economist, says. “Even as mortgage rates are expected to increase and home prices continue to rise, homebuyer demand remains steady as inventory issues have slightly improved.”
Khater expects that in 2022 strong home price growth will lift home purchase mortgage originations by more than $500 billion from 2020.
Freddie Mac and Fannie Mae economists predict that home prices will grow by nearly 17% overall for 2021 and then slow to about 7% growth in 2022. They predict the 30-year fixed-rate mortgage—which likely will end the year averaging about 3%—will inch up to 3.5% in 2022, a projection similar to expectations by National Association of REALTORS® economists.
Fannie Mae economists say that new single-family construction remains in high demand but continues to be hindered by ongoing supply constraints in materials and skilled labor. Also, economists expect inflation to run higher and suggest that the Fed’s tightening of its monetary policy, first by tapering its asset purchases, will likely impact housing.
Still, “even a modest tightening of monetary policy would of course impact housing, but we expect the effects to be largely muted given current market conditions,” says Doug Duncan, Fannie Mae’s chief economist. “Mortgage rates may rise in response to the tighter environment, but we expect the severe shortage of homes for sale to remain the primary driver of strong house price appreciation through at least 2022, limiting interest rate effects on home sales and home prices.”
Millennials are pooling their finances with roommates, friends, and significant others to buy a home together.
The number of home and condo sales by co-buyers is increasing. The number of co-buyers with different last names surged by a whopping 771% between 2014 and 2021, according to research from ATTOM Data Solutions.
The trend has especially taken off during the pandemic. From April to June 2020, 11% of buyers purchased as an unmarried couple and 3% as “other” (e.g., roommates), according to data from the National Association of REALTORS®. That is up from 9% and 2%, respectively, from 2019.
“During the pandemic, people have been renting and they may have wanted more space and so they looked at, perhaps, their roommate and decided, ‘Let’s go buy a home together,” Jessica Lautz, vice president of demographics and behavioral insights for NAR, told The Wall Street Journal.
But affording a home is not easy for a first-time buyer. The median existing-home price for all housing types was $356,700 in August, up nearly 15% from a year earlier.
Besides the higher costs to buy, student loan debt is increasingly burdening young adults, hampering their ability to afford a home. Half of the potential home buyers surveyed this year say they haven’t bought yet because of student debt, according to a report by the National Association of REALTORS® and Morning Consult. Millennials are the most likely to point to student debt for delaying homeownership.
Those with student loan debt are still finding ways to buy. For example, they may apply for a mortgage with a co-signer such as a family member or friend to help to improve their credit status.