With fears of even higher rates on the horizon, buyers want to buy now which might relight the fire in the housing market, according to new data from Altos Research…(Altos)
- One of the best indicators of supply and demand is, of course, price. When demand is high or supply is low prices will rise. When you see both happening at the same time you get the first part of 2021. Prices indicate we could be heading back to the market. Mike Simonsen tweeted, “Both median asking price and the price of the new listings ticked up this week. Median home price in the US this week is just over $370,000.”
- Prices never lie. The price hikes are thanks to inventory levels falling to new record lows. “…active inventory of unsold single family homes hit a new record low this week…Only 284,000 homes unsold on the market right now.”
- The final piece to the puzzle is demand. With rates rising above 3% and double-digit annual price gains, some buyers decided to sit on the sidelines and wait for things to cool off. Ali Wolfe, Chief economist at Zonda, tweeted that buyer hesitancy had called almost in half from the end of this summer. “60% of builders were reporting buyer hesitancy as a main challenge from July through Sept. That % has been coming down ever since. For our mid-January survey, just 31% of builders are reporting buyer hesitancy”
No one is questioning whether or not the market is heating up again. The only question is how hot will things get. Will this just be a normal spring season that happens to be happening in January? Or will this be 2021 all over again? Time will tell.