Housing shortages likely will worsen over the next year as a shift in the housing market occurs, according to a report from realtor.com®. That shift could make it tougher for home buyers to find a home to purchase, despite low mortgage rates that are making it increasingly attractive to do so.
Housing inventories could likely get near record lows by early 2020, says Danielle Hale, realtor.com®’s chief economist. In June, the number of newly listed homes fell by 2.3% compared to a year ago.
At the beginning of the year, the housing market looked poised for a long-awaited turnaround for inventory levels. The number of listings increased 6.4% in January compared to the year prior. However, since that time, the rate of the increase has slowed significantly each month of this year, realtor.com® notes.
Hale attributes the lower inventory of homes for sale to a multitude of reasons, including the preference of baby boomers to age in place rather than move; reduced consumer confidence in the economy; and “rate lock,” in which homeowners purchased a home or refinanced with a mortgage rate below today’s low rates. However, the “rate lock” may become less common as mortgage rates continue to fall. The latest average for the 30-year fixed-rate mortgage was 3.60% last Thursday, the lowest average since November 2016, according to Freddie Mac.