The housing market is hot and with low mortgage rates and low home inventory, buyers are feeling the crunch. Inventory of homes for sale remained at a record low 1.03 million homes in February, the same as January, and dropped a record 30% from a year ago, according to the National Association of Realtors.
In February 2021 homes stayed on the market for just 20 days which was a record low. Homes that were on the market between $250,000 to $500,000 sold in just 14 days. This has also pushed the median home price to $313,000 which is 16% higher than this time last year.
Lawrence Yun, NAR’s chief economist, believes even though housing prices are rising, stimulus packages are helping many to afford homes. February usually has an increase in housing inventory coming on the market but this was not the case in February 2021.
Buyers looking for homes priced between $100,000 and $250,000 will have a harder time with their search. Inventory was down 37% from inventory last February 2020. Homes under $100,000 were almost 50% down from a year before.
Just because there is a low supply of home inventory doesn’t mean the buyers disappeared. The low supply of listings has spiked home prices considerably. Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, says there is still a strong demand for homes.
“This is being driven by an improving job market and strong demand from first-time homebuyers, as well as mortgage rates — which remain quite low from a historical perspective, even with the recent increases,” he said.
For first-time home buyers, this market can be a challenge. These buyers are competing against multiple offers and all-cash offers. If you are in the market for a home, choose a Realtor who can help navigate you through this crazy market.
