Finally, Some Good News for Homebuyers?
Good Monday Morning!
There is some good news for homebuyers who have been struggling to find homes! The inventory of homes for sale across the country is beginning to increase. Any rise in home inventory is a welcome sight after years of extremely low supply. The biggest challenge we face—both nationally and locally—is home affordability. In some areas of the country, home values have decreased, but in places like Eugene and Springfield, prices continue to rise. Affordable homes for first-time buyers in Eugene and Springfield are almost non-existent. This presents a serious issue, as the gap between income growth and housing costs continues to widen. A continued increase in housing inventory may begin to put downward pressure on home prices due to growing competition. A healthy housing market needs that competition to help regulate pricing. An increase in the number of homes for sale, along with a decrease in mortgage interest rates, is urgently needed to improve housing affordability. The following is a recent article from the National Association of Realtors (NAR) that addresses these recent changes.
Home buyers are finally finding more options of homes for sale as housing inventory rebounds in many markets across the country—but supply is still largely falling short, according to the newly released report, “Housing Affordability and Supply,” produced by the National Association of REALTORS® and realtor.com®.
Rising inventory may even be masking a deepening crisis for lower-income buyers. As the report notes, “when viewed through the lens of income and purchasing power, it becomes clear that access to affordable homes remains out of reach for many buyers.”
The increase in overall listings—up nearly 20% compared to a year ago—is a hopeful sign for a housing market that has long been starved for inventory for a decade. It may also bring relief to some buyers, with price pressures beginning to ease in markets where inventory is rising most.
“Shoppers see more homes for sale today than one year ago, and encouragingly, many of these homes have been added at moderate income price points,” says Danielle Hale, realtor.com®’s chief economist. “But as this report shows, we still don’t have an abundance of homes that are affordable to low- and moderate-income households, and the progress that we’ve seen is not happening everywhere. It’s been concentrated in the Midwest and the South.”
Who’s Struggling the Most With Inventory Shortages?
Higher-income households—those earning $200,000 or more—have access to roughly 80% to 100% of for-sale listings nationwide (though not necessarily 80%–100% of the listings in their own market). For those earning less, affordability drops off sharply. According to the report, two main groups are facing the most severe inventory shortages:
- Lower-Income Buyers: Households earning under $50,000 per year and who are looking for homes priced below $170,000 have even fewer affordable options than they did a year ago, according to the report. As of this spring, buyers in this group could only afford 8.7% of active listings. A more balanced market would mean they could afford about one-third of listings, reflecting their share of U.S. households.
- Middle-Income Buyers: Buyers earning between $75,000 and $100,000 annually have seen the greatest improvements in the affordable housing supply when compared to all income groups. About 21% of listings are within reach for these households. But a gap still persists. Consider, in 2019, these middle-income buyers could afford nearly half of all listings, a level considered more balanced for the market. This suggests a shortage of more than 400,000 listings priced below $255,000, which would be affordable to this income group, according to the report.
Have An Awesome Week!
Stay Healthy! Stay Safe! Remain Positive! Trust in God!
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