Why have sales of previously owned home sales dropped with inventory at record lows? Is the housing rebound over? An unexpected drop in the market occurred between March and February, when sales of previously owned homes fell 0.6%. The National Association of Realtors’ reported several reasons behind the shift. The first being a lack of supply in the housing market, not a lack of demand. Only 30,000 net new units hit the housing market in March, this number is down a whopping 16.8% from the previous year, and is the lowest inventory level for the month of March in 13 years.
The National Association of Realtors asserts that rising demand and falling supply continue to push prices higher. The median home price in March is up 11.8% from last year. In the Western market, particularly, median prices rose 26.1% from last year, a true signifier of inflated price points.
Additionally, buyers are becoming increasingly frustrated and some sellers are getting greedy. Due to low inventory, many sellers aren’t willing or able to sell homes at prices down from seven years ago. Sellers aren’t confident they can find another home to move into, so they are less likely to list their homes.
The current market isn’t fun for real-estate agents, but it is good for home builders. If would-be buyers are motivated to buy now to take advantage of low prices and low mortgage rates but can’t find a home on the resale market, they’re likely to turn to the new-home market. New homes have made a comeback from the depressed levels of a year ago, and builders are regaining market share.
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