Properties have been flying off the market this spring, leading to fierce buyer competition. Even with the housing economy as strong as it’s ever been, there’s still room for it to grow.
Read on for national housing research from the Keller Williams research team that informs on the upcoming summer 2021 market. When you’re finished, make sure to review your local MLS for the most accurate picture of the market, so you can help your clients navigate the current landscape with confidence.
1. Existing home sales are as competitive as ever.
The topic on everyone’s mind right now is inventory. In March, existing home inventory was down 36.4% from March of 2020, and new home inventory is similarly down 44.6%. The market for existing home inventory appears to have bottomed out for now at 2.1 months.
Because of high demand, listings are going to be very competitive in this seller’s market. Realtors need to position themselves at the top of homeowners’ minds in order to secure the competitive listings. Although it is predicted that inventory will slowly increase as the pandemic slows down, staying on top of lead generation for listings will remain crucial.
“It’s not that new listings aren’t coming to the market. They absolutely are, but they’re not keeping pace with demand, “ says KW Research Director Jim Talbot. “Listings are going to be at a premium this year; it’s going to remain competitive.”
March saw the sale of 6.01 million existing homes, which is a 12.3% increase from sales in March 2020. Expect sales to stay strong even as inventory increases. Even as more homes start to become available, there will be more than enough demand to close sales.
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2. New home sales are booming.
As expected, the tight inventory of existing homes has meant that new builds are needed to pump up the inventory pool. Across the country, 1.1 million new homes were sold in March. That’s 20.7% more than February and an impressive 66.8% more than March of 2020. As the weather is warming up in many regions of the country, construction of more new homes can be expected to be completed. Builder confidence has remained near all-time high levels at 83. In February, builder confidence was at 82, while March 2020 builder confidence was sitting at 30 due to the beginning of the pandemic.
“Given rising prices, high demand and low inventory, builders are seeing a lot of great signs to ramp up production,” shares Talbot.
This supply will help ease demand for properties, although demand is still expected to outpace supply.
3. Mortgage rates are low but may increase.
The average mortgage rate for the month of March was 3.08. Mortgage rates are always subject to fluctuation, but they are expected to remain low for the near future. This is excellent news for buyers who are purchasing a property, but it is also great for anyone looking to refinance their home. However, rates aren’t going to stay near historic lows forever and will eventually rise, especially with the way prices are rising. Buyers should act now and take advantage of low mortgage rates.
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4. Home prices continue to skew high.
Due to restricted inventory, the price of existing homes reached a national median of $329,100 in March. This is a 17.2% increase from last year. The median new home price only saw a 0.8% increase in price at $330,800.
With such high competition in the market, it’s more important than ever for agents to know the market predictions so clients can take advantage of market opportunities.