MINT HILL, NC -As a home buyer, you might have started shopping for a new home recently. You spent the time getting pre-approved, set up a list of the things you want and need in a home, and even contacted a local real estate agent.
After all this work, you found out there simply are not that many homes on the market that fit your criteria. This might have you questioning your criteria for a home or even your buying budget. However, there simply are not that many homes on the market right now, across the United States.
Of course, the national real estate market doesn’t always match every local area. The Mint Hill real estate market might have more homes for sale compared to a market out west. Each local market will be a bit different, so make sure to check your market before you just give up on your home search.
Where are all the Homes For Sale?
Before the pandemic happened, there was already a shortfall estimate of about 4 million homes across the nation. This number went up to about 6.5 million by 2022, according to Realtor.com.
The inventory decline was first kicked into gear by low mortgage rates and high demand. This caused many buyers to pay a premium to get a new home. However, times have changed rather quickly with higher mortgage rates pricing many would-be buyers and sellers out of the market.
Is the Solution More Inventory?
Some experts think the real estate market issues would simply be solved by more inventory. However, this might be like throwing money at an issue and it might only be a short-term fix. Even if more homes were on the market right now, there is no guarantee those homes would appeal to current buyers or would fall into their price range.
Other experts will trace this to not enough homes being built. However, with home builders having to offer deals to unload the stock they have, it’s not much of an incentive to increase the amount of homes they are building.
The Bigger Issue is Mortgage Rates
Sometimes, we cannot just look at the symptoms, but we must get to the root of the issue. The bigger issue causing the lack of inventory is the mortgage rates.
Often, we only think mortgage rates impact home buyers and we don’t consider the impact they have on home sellers. Since most homeowners don’t want to go back to renting, when they sell, they also buy. This leads to a rather important question, would you list your home for sale right now, if you have a 3% mortgage rate?
If you sell, and you have a mortgage rate under 5%, currently, you are going to buy with a higher mortgage rate. For some, it would be double their current rate, which will cost them far more than it’s worth, even if they could get above fair market value for their current home.
While new inventory might help with market recovery, the real solution is time. If mortgage rates are not going to come down, it will simply be a matter of time before these homeowners decide there is a good reason to sell their home, such as relocating to a new area or downsizing.
There is likely no quick fix to the current inventory and mortgage rate issues. Over time, things might get sorted out, but in the short term, it’s likely we are headed into a summer real estate season with bidding wars and higher home prices.
I would love to be part of your journey when the time is right for you. If you ever have a real estate question or need, or know someone who does, trust that you can turn to me. I will help you make the right move! Anna Granger (704) 650-5707 | email@example.com | www.1stchoicepropertiesinc.com