By KIMBERLEY HAAS
Potential buyers patiently waiting for a surge in inventory before jumping into the housing market may be out of luck this fall.
Mike Simonsen, founder and president of Altos Research, said during a webinar on Thursday that there are no signs of such a thing happening anytime soon.
“There is no sign anywhere in the data of any surge in inventory,” Simonsen said. “So if you’ve got a buyer that’s like ‘I’m waiting for the big crash to come,’ the question is how long are you going to wait? Because it could come, maybe in 2025, but there’s no sign in the data right now of any of that coming.”
Simonsen has said that he expects 2023 will finish with fewer homes on the market than last year unless interest rates spike, creating more inventory, but recent jumps to above 7% aren’t making much of an overall difference yet.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.09%. A year ago at this time, the 30-year FRM averaged 5.13%.
“If rates stay in the same area, around 7, then we’ll have a normal seasonal curve coming up. We’ll finish the year with 10% fewer homes than last year. It could be as many as 20% fewer,” Simonsen said.
Simonsen said there are 50% fewer homes on the market this year than there were in 2019, before the pandemic boom. There are currently about 492,000 single-family homes for sale.
Simonsen said the median price for new listings is $399,000.
With fewer existing homes on the market, newly built construction has been attracting buyers.
A report from Redfin estimates that newly built homes made up almost a third of all single-family homes on the market in Q2 2023 at 31.4%.
Leaders at the National Association of Home Builders say building more homes is the only way to satisfy unmet demand and achieve a healthy supply-demand balance. They are calling on policymakers at all levels of government to help boost the nation’s housing supply in order to ease housing inflation.
“Policy changes such as obtaining a new softwood lumber agreement with Canada, speeding up permit approval times, providing resources for skilled labor training, and repealing inefficient regulatory rules will enable more construction and yield more inventory for a market that is critically undersupplied,” NAHB Chairman Alicia Huey said in a statement on Aug. 14.
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