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Buyers May Have Even Tougher Time Finding a Home

Housing shortages likely will worsen over the next year as a shift in the housing market occurs, according to a report from®. 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,®’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,® 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.


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