May Could See the Start of Relief
The market for sellers has been red-hot since Summer 2020. With various factors coming together to keep that market going, we are now seeing some signs that buyers may soon have an edge. Rising inventory, falling prices, and millennial sales are sure to have a big effect for the Spring 2022 homebuyer!
Inventory Normalizes Slightly for the Spring 2022 Homebuyer
First, one of the biggest reasons for such a discrepancy between buyers and sellers is the lack of available homes in general. According to a recent survey by Realtor.com, 64% of prospective sellers anticipate listing their home on the market within the next six months. This means that the available inventory will improve sooner rather than later. There is an estimated shortage of 6 million homes in the single-family market, and this steady influx of supply should begin to alleviate much of the anxiety felt by the Spring 2022 homebuyer.
Falling Prices, Rising Rates
Plus, average prices in general are beginning to stabilize. Over the last two years, price growth in the home market leapfrogged even the most optimistic projections. It’s not uncommon to see more than 50% growth in some select areas! These incredible rises appear to be levelling out; part of this is due to the rising interest rates. The Fed is currently expected to raise rates another 4 times over the current year. This has the effect of lowering price growth in most of the economy, not just the housing market. Be on the lookout, because the prices are starting to move in the buyers’ direction… slowly but surely, buyers find themselves in a much better position!
Millennials Head Up Sales as the Spring 2022 Homebuyer Prepares
According the to same Realtor.com survey, more than half of the upcoming sellers are millennials. These home are expected to be more affordable and average far below $500,000. This has huge implications for first-time buyers. The inventory for starter homes, or homes that are perhaps more affordable than larger single-family homes, has lagged the market at large. Some look to new construction as a potential start, and there are some positive signs in that area as well. Builders report that construction starts were up 22% in February compared to the prior year. Unfortunately, there is still much room to improve, as builders remain about 31% below the necessary targets to meet demand. This is one area we will definitely see some movement!
Conclusion
To sum it up, buyers find themselves in a position to succeed. More so than before, they are gaining the power to find better prices and affordable properties. Inventory is rising, rates are increasing, and millennials make up a large part of upcoming sellers. First-time homebuyers, rejoice! Your time is coming soon. Keep an eye on the next few months as the weather warms up… and keep an eye on some of my tips for increasing your home’s value!