Realtor.com Chief Economist Daniel Hale analyzes housing affordability on “Maria Bartiromo's Wall Street.”
number of houses for sale Market prices rose for the second consecutive month in December as the severe housing shortage finally began to ease.
The total number of homes for sale, including homes under contract but not yet sold, increased 4.9% in December compared to the same period last year, according to a new report from Realtor.com.
This is the second month since June 2023 that prospective home buyers have been able to see more unsold homes than at the same time last year.
“We're seeing inventory levels improve across the country, especially in the South,” said Daniel Hale, chief economist at Realtor.com.
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A lack of homes for sale has kept prices uncomfortably high, even as mortgage rates hover near the highest levels in 20 years. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
Inventories in the southern region in December increased by 7.7% compared to the same period last year. But in other parts of the country it was a different story. Inventories rose only 0.2% in the Midwest, fell 8% in the Northeast, and fell 14.8% in the West.
Despite an increase in the number of homes sold last month, inventory remains low compared to a few years ago. The available housing supply is still 34.3% lower than the typical amount before the crisis. COVID-19 pandemic The report says it started in early 2020.
“While December's increase in inventory levels is encouraging, it is important to remember that two-thirds of outstanding U.S. mortgages have interest rates below 4%, and more than 90% have interest rates below 6%,” Hale said. said. “While we are optimistic that inventory levels are moving in a positive direction, the number of homes on the market remains low compared to pre-pandemic levels.”
House prices could rise over next year as housing price crisis worsens
Although interest rates are falling slowly, home prices remain high as buyers deal with limited inventory. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
The housing shortage began as a result of an astronomical rise. mortgage interest rate.of federal reserve Thanks to an aggressive interest rate hike campaign, mortgage interest rates exceeded 7% last year for the first time in about 20 years.
Sellers who had low mortgage rates before the pandemic began are reluctant to sell, leaving eager buyers with few options.
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Although interest rates have been slowly declining (30-year fixed mortgage rates are currently hovering around 6.66%, according to Freddie Mac), they have fallen below the pandemic-era low of 3% and 2019. This is still well above the average of 3.9%.
