May 26th, 2017 5:39 AM by Jackie A. Graves, President
The supply of listings in
April fell 9 percent compared with a year ago.
Unfortunately for buyers,
the cheapest segment of the market is where supplies are lowest.
Home prices continue to rise at a fast clip, faster than incomes
and faster than new employment, but it is still cheaper to own a home than to
rent. So why are home sales falling? Because there are crazy few affordable
homes for sale.
supply of listings in April fell 9 percent compared with a year ago, and, in
turn, the number of days it took to sell the average home dropped to just 29,
the lowest since the National Association of Realtors began tracking that in
2011. There was a big increase in the number of listings that came on the
market this spring, but they were swept up so quickly that supplies were still
thing we added this month to our Realtors confidence index is analyzing data on
realtors' comments," said Danielle Hale, managing director of housing
research at NAR. "The two biggest phrases in the comments this month were
'low inventory' and 'multiple offers.'"
for buyers, the cheapest segment of the market is where supplies are lowest.
Sales of homes priced below $100,000 fell 17 percent in April compared with
2016, and in the under-$250,000 segment they fell more than 6 percent. That is where the highest demand is from younger buyers.
So when you combine that with new numbers claiming that it is
cheaper to buy than rent in all of the nation's 100 biggest metro markets,
which came in a new report from Trulia, you have to remember that the equation
only matters if you can
find an affordable
home. For certain markets, the math works better because the bulk of homes are
cheaper. In Baton Rouge, Louisiana, for example, it is more than 50 percent
cheaper to buy than rent (based on a 20 percent down payment and a 30-year
fixed mortgage), but in San Jose, California, it is only 3.5 percent cheaper.
in fact the advantage of buying versus renting is narrowing across the board. Rents are easing, as more and more new apartment units are completed, and home prices are rising. That makes the math more difficult.
some places, for some households, the decision to rent or buy a home may be too
close to call," according to the Trulia report.
it's a close call, then other factors like flexibility and low risk tend to tip
the balance toward renting. If rents continue to ease further, and homebuilders
don't ramp up production, home prices will continue to burn, and the decision
not to buy will get easier.
By Diana Olick - To view
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