In the housing market, we have seen some significant changes in recent times. The surge in mortgage rates has affected many people’s ability to buy a home. Home prices have also peaked and then become stagnant in many areas. Despite these changes, prices have not gone down as expected, primarily because of low inventory levels.
Lawrence Yun, the Chief Economist at the National Association of Realtors (NAR), believes that home prices will remain stable in most parts of the country, with minor changes in the national median home price. The lack of available homes on the market is putting upward pressure on prices, and with inventory levels remaining low, prices are not expected to crash anytime soon. According to Yun, the lack of inventory is limiting just how low prices will go.
With little choice but to bid up prices due to the low inventory, there is no scope for a price crash in the near future. Even industry expert Rick Sharga believes that low inventory is likely to continue to vex the housing market throughout 2023.
Homeowners are not under any pressure to sell their homes as they have plenty of equity right now, and that equity acts as a cushion for them, which lowers the chances of distressed sales like foreclosures and short sales. And with many homeowners locked into low mortgage rates, the equity cushion is expected to remain stable for the time being.
In such a market, it’s essential to work with a trusted real estate agent who understands the local area and can help navigate the current market volatility.
In summary, low inventory levels are the primary reason for the stability of home prices despite low buyer demand. If you’re considering moving this spring, it’s worth consulting with a trusted real estate agent to help you navigate the market and find the right property.
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