Why You May Want to Start Your Home Search Today
If you’re thinking about buying a home, you likely have a lot of factors on your mind. You’re weighing your own needs against higher mortgage rates, today’s home prices, and more to try to decide if you want to jump into the market. While some buyers may wait things out, there’s a reason serious buyers are making moves right now, and that’s the growing number of homes for sale.
So far this year, housing inventory has been increasing and that’s making the prospect of finding your dream home less difficult. While there are always reasons you could delay making a big decision, there are also always reasons to consider moving forward. And having a growing number of options for your home search may be exactly what you needed to feel more confident in making a move.
What’s Causing Housing Inventory To Grow?
As new data comes out, we’re getting an updated picture of why housing supply is increasing so much this year. As Bill McBride, Author of Calculated Risk, explains:
“We are seeing a significant change in inventory, but no pickup in new listings. Most of the increase in inventory so far has been due to softer demand – likely because of higher mortgage rates.”
Basically, the inventory growth is primarily from homes staying on the market a bit longer (known as active listings). And that’s happening because higher mortgage rates and home prices have helped moderate the peak frenzy of buyer demand.
Based off information from the Cromford Report, in the Greater Phoenix Housing Market the flow of new listings has eased substantially over the past few weeks. As recently as June 26, we reported a record weekly total of 3,169, which was the culmination of an elevated arrival rate that had lasted since April 26. However, this eased in July to a more normal 2,700 per week and during August it has fallen well below normal to reach 2,224 as of today.
This is down 9.7% from the same week last year and down 5.2% from the same week in 2020. New supply can be properly described as weak now, so rather appropriate for a market with weak demand, as we have been experiencing over the last several months.
If new supply stays low, then we are unlikely to see the sharp increases in active listing counts that we have reported between April and July. In fact, if demand picks up a bit, supply could start to retreat again. The first sign of this would be counts that fall when comparing the same weekday 7 days earlier. This is not yet occurring for the market as a whole, but several segments are seeing a small drop in active listings comparing today with a week ago. This includes:
Single-family detached in:
Of course, interest rates could rise again and take the wind out of the sails. But at the moment, overall demand is improving and in the more central parts of the valley such as Phoenix, Tempe and the cities above, it would not be surprising to see the market balance move towards sellers over the next several weeks. The outer areas are more likely to remain weak for sellers, with additional supply coming from new home developers all the time and a stronger flow of new re-sale listings from investors and iBuyers.
The graph below uses data from the Cromford Report to show how much active listings have risen over the past eight months:
Why This Growth Is Good News for You
Regardless of the source, the increase in available housing supply is good for buyers. More housing supply actively for sale means you have more options as your search for your next home. A recent article from realtor.com explains just how significant the inventory growth has been and why it’s good news for your plans to buy:
“Nationally, the inventory of homes actively for sale on a typical day in July increased by 30.7% over the past year, the largest increase in inventory in the data history and higher than last month’s growth rate of 18.7% which was itself record-breaking. This amounted to 176,000 more homes actively for sale on a typical day in July compared to the previous year and more choice for buyers who are still looking for a new home.”
The growth this year is certainly good news for you, especially if you’ve had trouble finding a home that meets your needs. If you start your search today, those additional options should make it less difficult to find a home than it would have been over the past two years.
If you’re ready to jump into the market and take advantage of the increasing supply of homes for sale, let’s connect today. The opportunity is knocking, will you answer?
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.