Home inventories are at their lowest levels in 35 years, according to Frank Nothaft, former Freddie Mac chief economist and now chief economist with CoreLogic. Why? A variety of reasons.

Rose Quint, senior vice president of research with the National Association of Home Builders, (NAHB), when asked about there being fewer listings in 2018 than in 2017, reported at the NAHB’s International Builders Show in Orlando that “70% of survey participants like their house and are comfortable in it…they don’t want to take on the hassle of finding and moving” to a new place.

Nor do homeowners want to take on a new mortgage for a new house that is higher than the mortgage they have on their current house. With mortgage interest rates expected to rise to 4.5% in 2018, “realtors,” said Nothaft, “call this ‘the lock-in effect.’” These homeowners will “likely opt to stay longer and update their current home.”

Combine rising interest rates with an expected 6% increase in home prices due to such low inventories and the result is a 13% increase in a typical mortgage payment. Quint said, “That’s the crux of affordability.”

Trulia’s latest data adds to the issue of affordability. This online real estate service found that listings that were on the books were the” most unaffordable on record.”

– First time buyers have to pay an average of 40% of their monthly income to afford a monthly payment.
– Trade-up buyers would have to pay+26% more of their monthly incomes for a monthly payment.
– Premium market buyers would have to pay +14% more of their monthly incomes for a monthly payment.

All this being said, the NAHB said that the new home sector of the market had the best year ever since 2008. Robert Dietz, chief economist with NAHB said that in 11/17, new home sales were up +17.5% from 10/17 thereby “…reaching the fastest sales pace in more than 10 years.”

The only problem with the new single family home sector of the housing market is that this sector is still only 73% of the 1.343M houses they ought to be building to keep up with today’s current household growth, according to Dietz.

Why so relatively new single family homes? Again, a variety of reasons.

Lack of buildable home sites, blindsiding rising costs of materials such as lumber and cement, and the menacingly small labor force that, Dietz said, “…doesn’t look like it’s going to change much over the next few years.”

There you have it…even fewer listings in an already chocking market due to due to ”the lock-in effect,” rising interest rates, rising home prices, and not enough newly constructed homes. And, don’t forget effects of the tax law on homeownership.

Anticipate Listings To Be More Scarce in 2018

Home inventories are at their lowest levels in 35 years, according to Frank Nothaft, former Freddie Mac chief economist and now chief economist with CoreLogic. Why? A variety of reasons.

Rose Quint, senior vice president of research with the National Association of Home Builders, (NAHB), when asked about there being fewer listings in 2018 than in 2017, reported at the NAHB’s International Builders Show in Orlando that “70% of survey participants like their house and are comfortable in it…they don’t want to take on the hassle of finding and moving” to a new place.

Nor do homeowners want to take on a new mortgage for a new house that is higher than the mortgage they have on their current house. With mortgage interest rates expected to rise to 4.5% in 2018, “realtors,” said Nothaft, “call this ‘the lock-in effect.’” These homeowners will “likely opt to stay longer and update their current home.”

Combine rising interest rates with an expected 6% increase in home prices due to such low inventories and the result is a 13% increase in a typical mortgage payment. Quint said, “That’s the crux of affordability.”

Trulia’s latest data adds to the issue of affordability. This online real estate service found that listings that were on the books were the” most unaffordable on record.”

– First time buyers have to pay an average of 40% of their monthly income to afford a monthly payment.
– Trade-up buyers would have to pay+26% more of their monthly incomes for a monthly payment.
– Premium market buyers would have to pay +14% more of their monthly incomes for a monthly payment.

All this being said, the NAHB said that the new home sector of the market had the best year ever since 2008. Robert Dietz, chief economist with NAHB said that in 11/17, new home sales were up +17.5% from 10/17 thereby “…reaching the fastest sales pace in more than 10 years.”

The only problem with the new single family home sector of the housing market is that this sector is still only 73% of the 1.343M houses they ought to be building to keep up with today’s current household growth, according to Dietz.

Why so relatively new single family homes? Again, a variety of reasons.

Lack of buildable home sites, blindsiding rising costs of materials such as lumber and cement, and the menacingly small labor force that, Dietz said, “…doesn’t look like it’s going to change much over the next few years.”

There you have it…even fewer listings in an already chocking market due to due to ”the lock-in effect,” rising interest rates, rising home prices, and not enough newly constructed homes. And, don’t forget effects of the tax law on homeownership.