About 40 percent of would-be homebuyers in a June realtor.com [1] survey reported that finding a home that fit their needs was the biggest obstacle to making a purchase. Lately, more prospective buyers are reporting that they are having trouble simply finding a home at all.
Home sales are at a healthy level—in May, the National Association of Realtors reported an existing-home sales rate of 5.63 million [2], the highest level in nine years. But as high as home sales have been lately, they could be higher—according to realtor.com chief economist Jonathan Smoke, 13 percent more people are looking to buy a home this summer—yet there are 5 percent fewer homes for sale, which computes to an inventory shortage.
“So it’s not surprising that this low level of inventory—along with the rapid-fire speed at which homes are selling and the high level of price appreciation—has led to the general perception that we’re in a seller’s market,” Smoke said. “Fair enough. But that doesn’t mean it’s all smooth sailing for sellers either.”
Sellers reported that their biggest issue is time—40 percent of sellers surveyed in June said they had just started thinking about selling, and the percentage has been on the rise each month this spring. The news that more homeowners are thinking about selling as home prices recover and mortgage rates hover near record lows is encouraging for the housing market—but when there is no place to go, selling a home isn’t a simple matter, Smoke said.
About 18 percent of potential sellers reported that they were unwilling to sell their home until they first had another home under contract, making that the No. 2 problem on the list for potential sellers. The survey found that 90 percent of all sellers intend to buy another house, so “clearly whether the purchase needs to come before or simply close to the current home’s sale, not being able to find a home is limiting both demand and supply,” according to Smoke.
While home sales typically peak in June or July, Smoke noted that this year might be an exception to that norm due to strong demand, near-record low mortgage rates, and a higher number of buyers and sellers entering the market that could extend that peak time. Peaks, however, don’t last forever.
“The seasonal pull is as powerful as the tide—eventually we will run out of time as school starts, weather shifts, and a new president gets elected,” Smoke said. “These factors will likely make this fall slower than usual, especially relative to the very busy spring and summer.”