The number of existing homes being sold fell in April, even as home prices continue to rise. According to the National Association of Realtors, the number of home sales fell to the lowest level it has been since before the beginning of the pandemic. At the same time, though, there are many people looking to become homeowners, only to find there is simply not enough available inventory to go around.
The Current State of the Housing Market
April saw a continuation of the previous few months, with available inventory continuing to remain scarce, demand remaining high, and prices continuing to rise as a result. Despite the fact that some people are becoming more skeptical that now is a good time to buy a home, there are still far more prospective home buyers than there are available homes. Even rising mortgage interest rates are doing little to scare off prospective buyers, at least for now.
Why This is Happening
One major reason for the high housing prices for home sales is due to a lack of available homes to buy. When the pandemic hit, many construction projects were put on hold, and many people who might previously have been looking to sell their homes paused their plans, meaning there are relatively few homes on the market. Even with construction again picking up, however, high interest rates are making it more difficult to develop properties, and construction of new homes continues to lag behind the demand for properties to purchase.
A Potential Reversal Could Be Coming
That being said, there are a number of signs that the market could be turning around. With interest rates starting to rise, mortgages are becoming more expensive, and some home buyers may balk at the mortgage payments they may need to make on previously affordable homes. In addition, as construction projects start to catch up with demand, prices will naturally begin to fall due to new supplies being able to meet the high demand.
What This Means For Home Buyers and Sellers
Right now, there has rarely been a better time to be a home seller, with many people getting exceptionally good prices for their homes. For buyers, however, there is an increased risk of paying far more for a property than it might have been worth even a few months ago. It is not surprising that some people are becoming more hesitant to buy, as they become more convinced that the market is due to cool down soon.
At Liongate Homebuyers, we assist our clients with a variety of services related to buying and selling real estate. We have experience handling real estate financing, especially for developers and house flippers. For more information, please contact us at 516-548-6553, or visit our contact page.
