Delivered to more than 70,000 industry professionals each day, the Daily Newsletter is the definitive compendium of the most relevant mortgage and real estate news and data of the day. View our latest newsletter below. View our latest newsletters below, or use the date selector to view our previous newsletters. Almost everyone has said it or heard it: Existing home sales are in the toilet because there is no inventory and there is no inventory because no one wants to part with their 3% mortgage when rates are 7%. “There simply aren’t enough homes to sell,” according to NAR’s chief economist, Lawrence Yoon. “The market can easily absorb double the inventory.” More inventory would certainly be a good thing in almost every respect. Doubling inventory will probably keep prices in check or push them down a bit, but it may not evoke as much buying demand as you might assume. Two separate stats in current home sales data illustrate this point. The first is for inventory in terms of units. This graph makes it look as if the stock is at an all-time low and is not increasing as fast as it usually is at this time of year. But the takeaway changes a bit when we look at inventory in terms of “months of supply.” Since it’s not very easy to glean a quick takeaway from the two charts above, here’s the thing: In terms of units, no stock is anywhere close to mid-2020 levels while the “supply months” are much higher. Let’s grow old: All this to say: inventory alone is only part of the problem. There is also definitely a demand issue in the housing market, likely due to pricing, software availability, and lesser other factors. After all, sales haven’t been as good since trying to rebound at the beginning of the year.
Source link
