Video: Here’s Where New Home Demand Is Strongest
Originally published by: CNBC — November 22, 2019
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The supply of homes for sale is falling across the nation, as demand soars and attractive mortgage rates pull buyers off the sidelines.
At the end of October, inventory nationwide fell to a 3.9-month supply, according to the National Association of Realtors. The means that at the current sales pace it would take that long to sell all of the 1.77 million homes available for sale.
A 6-month supply is generally the sign of healthy market, balanced between buyers and sellers.
Inventory has been falling annually for five straight months, after it recovered slightly toward the end of last year, due to a spike in mortgage rates. Rates began falling again by spring of this year. Homebuilders have been increasing production slowly, but it’s not enough to meet the increasingly strong demand.
Millennials have waited longer to buy homes than previous generations, due to the last recession, but now the economy is stronger, and they are aging into their buying years at a fast clip.
“A lack of entry-level homes means newcomers to the market can have a hard time getting a foothold,” said Matthew Speakman, an economist with Zillow. “They and other budget-conscious shoppers shy away from prices in many of the country’s most populous areas, creating a nation of would-be home buyers who show preternatural patience in waiting for the right home to come along.”
For additional information on recent residential market developments, please read the most recent Housing Chartbook by Wells Fargo.