Job growth is boosting the economy and housing demand, but sales are hemmed in by low inventories in many parts of the country. When houses go on the market, they’re selling fast. Tight demand is sending prices up, at a rate of about 6 percent a year, far outpacing wage growth. As that gap widens, more households will be priced out of the market.
Jobs are growing, incomes are rising, and interest rates remain low, yet the home ownership rate of 63 percent is at a 50-year low. The reason is a lack of inventory in many U.S. markets. Home ownership isn’t likely to budge much, especially if interest rates start to rise, which NAR Chief Economist Lawrence Yun thinks is likely if the economy stays healthy.
REALTORS® are seeing strong buyer demand against low, but slightly improving, inventory levels, continued price increases, and fewer days on market. But there are growing concerns in the industry and among consumers about rapid price gains and rising interest rates.