Housing inventory is at its lowest level in nearly 40yrs and this is causing a housing crisis, according to the National Association of Realtors. As of the end of Feb for the US housing market, there were 1.07M units for sale and that equates to 1.8 months of inventory. We need 2.4M more homes to be listed for sale to have a six month supply of homes and therefore, a balanced market. Part of the reason why inventory is so low is that homes are selling at a faster pace than active listings in 70% of the metro areas. Another reason is because housing construction hasn’t ramped up enough for our US real estate market. This is partially due to the fact that prices for construction materials have skyrocketed.
The National Assoc of Home Builders announced a couple of days ago that prices paid for goods used in residential construction have increased 9.8% over the past 12 months. In fact, lumber and steel mill products have reached record highs. With these sky high prices, it’s causing some builders to hit the pause button on construction because permits pulled AND housing starts have decreased in February.
In the meantime, according to Redfin, home prices and the asking prices of homes BOTH reached all-time highs for the 4-week period ending April 4th. With home prices surging, a foreclosure crisis and an influx of foreclosures in the near term seems highly unlikely.
And to give you a quick update regarding mortgage interest rates, the average for a 30 yr FRM is ~3.3% and that’s down from the 52wk high of 3.45%, according to the Mortgage News Daily.
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Comment below: what’s your housing market 2021 forecast and housing market forecast 2021? Do you think a housing crash 2021 will happen and there will be a housing crash due to a housing bubble, a 2021 housing market crash 2021 or is your housing market predictions that the real estate market and home prices will continue to surge?
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Jason Walter, CPA (lic 103885)
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