Potential homebuyers are looking at three key dynamics currently driving the national real estate market: low mortgage rates, high demand, and low inventory. These dynamics feed off each other and create a ripple effect throughout the market that’s currently impacting everyone looking for a home.
Low mortgage rates: Current mortgage rates are some of the lowest we’ve seen in decades. With low mortgage rates comes a higher demand for homes to purchase. However, as anyone can tell you, it’s nearly impossible to buy what isn’t for sale. While the demand might be there, the inventory isn’t. This is making it hard for potential homebuyers to take advantage of the low mortgage rates.
High demand. Millennials born in 1990 will be turning 30 this year, and their desire to own their own home is strong. In fact, there are plenty of millennials out there who would like to take advantage of low mortgage rates. They would be buying homes if they could actually find homes for sale. In addition to low inventory, finding an affordable home and student loan debt are also burdens that are delaying homeownership for millennials.
Low inventory: Even though demand is high, the inventory isn’t there for potential homebuyers. Existing homeowners are taking advantage of low mortgage rates to refinance. This means they have less incentive to sell, which drives down supply. Current inventory in the housing market is at the lowest level it’s been in 30 years.
Coastal markets on the east and west sides of the United States are seeing some of the lowest inventory levels in the country. However, states in the Southeast region, including Florida, Texas, Louisiana, and Georgia have more supply to offer because this where most of the homebuilding is happening.
Source: Yahoo.com
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