The June numbers are in, and the National Association of Realtors (NAR) is reporting a 1.5% increase in pending homes sales for the month. This reverses a 3-month downward trend, with low inventory levels likely being the primary force behind the jump.
When asked about the latest report, NAR Chief Economist Lawrence Yun said, “Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria.”
“Housing inventory declined (in June) and is a staggering 7.1% lower than a year ago,” Yun said.
The low-inventory issue seems to be a problem with no real end in sight. Potential homebuyers who have been sitting on the fence may want to consider jumping on a property that fits what they want if they happen to find one. Chances are it will be sold soon and waiting will only lead to fewer options and higher prices down the road.
The upside to there being less homes available and increasing prices is that investors are staying away from the market giving homebuyers a little less competition out there.
“It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market,” Yun said. “Fewer investors paying in cash is good news as it could mean a little less competition for the homes first-time buyers can afford.”
“However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market,” Yun said.
Supply shortages almost always lead to a spike in prices, so homes that homebuyers view as “affordable” may not fit that description in the coming months. All the more reason to act fast when you find the home that fits your family’s needs before home prices hit their cap.