The housing industry and its economic factors depend on supply and demand. The existing home sales data shows the tightest housing market on record. The demand has not gotten significantly shorter since last May/June, and buyers and sellers are continuing to connect at a record pace. This trend shows that the housing market is as strong as it was during the housing bubble. It is nowhere too close to a level where you can imagine the balance of real estate market conditions. Speedy home sales continue in all regions of the country and the median sales price continues to have double-digit growth.
Although millions were laid off or furloughed it didn’t prevent house hunters from buying homes across the nation. As a result, the housing market saw the highest pace of sales growth since the height of the unprecedented housing boom in 2005. That expansion was driven by negligent lending in the subprime mortgage market and the current housing boom is driven by the intense demand and record-low mortgage rates. Both of these factors were driven by the coronavirus pandemic.
When Many market watchers are curious to know how long will this housing boom last or will the market eventually crash? Well, so far, the housing market continues to be sizzling hot resulting in higher home prices and quick-selling homes. The only factor of concern is the housing supply which continues to fall short of demand. Increasing the supply of homes for sale would certainly help bring balance to this strong seller’s market, but the most recent housing market trends don’t suggest that inventory is likely to improve soon.
Here’s how the national housing market has been trending for the past couple of weeks and its comparison with the time when the shutdowns were imposed in the country.
- Housing demand continues to outpace the supply side.
- With buyers active in the market because of the uptick in mortgage rates, homes are selling quickly.
- Time on the market was 35 days faster than last year.
- Homes are expected to be selling fastest from now until mid-summer.
- The housing market is still relatively undersupplied, and buyers can’t buy what’s not for sale.
- New listings were down 1 percent, taking a dip after 8 consecutive weeks of growing numbers of new sellers.
- Fannie Mae’s May 2021 survey shows the rising seller sentiment, so this week’s dip in new listings should be a temporary one.
- The potential gains in new listings will lead to some big numbers ahead in the peak homebuying season.
- Total active inventory or homes for sale on the market remains 46 percent below this time last year.
- This means a still limited number of homes for sale, but a substantial improvement over the last few weeks.
- The total number of homes actively available for sale continues to be less than half of what it was last year.
According to Zillow, the housing market forecast for 2021 has improved but lingering economic uncertainty may temper some of the predictions.
The forecasts for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand.
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