More homes are for sale across the nationDate posted: 8/6/15 08:15:00 AM
There's a reason Stephanie Karol, an economist at IHS Global Insight, is bullish about the nation's housing market: there are more homes for sale.
Karol told The Associated Press that more homeowners are listing their properties for sale, allowing for a greater supply of homes to lure potential buyers to the market. It also has a trickledown effect, as a larger supply of inventory helps fuel modest price gains.
"This is exactly the sort of pattern we want to see," Karol said.
The number of homes for sale across the nation increased 3.5 percent from June to July. That pushed the total inventory to 2.37 million, which is the most in nearly two years.
"The momentum is in the right direction," economist Andrew Labelle told the AP. "Sustained jobs gains, as well as the fall in mortgage rates since the beginning of the year, appear to have unleashed at least some pent-up demand."
The sales of existing homes climbed 2.4 percent in July to a seasonally adjusted annual rate of 5.15 million, according to the National Association of Realtors. That rate is the highest in nearly a year.
New homebuyers slowly getting back into the market
First-time homebuyers are considered vital to a healthy housing market. In the past, first-time buyers have accounted for roughly 40 percent of all housing purchases.
While the current number is still lagging by historical standards, new buyers made 29 percent of all home purchases in July, which was up slightly from June. One reason first-time homebuyers are so important to the market is that they allow shoppers looking into bigger homes - move-up buyers - a greater opportunity to sell.
Move-up buyers not as common as they once were
But after so many foreclosures during the Great Recession, move-up buyers have been scarce. Part of the reason is that some people are still in the red, which makes it very difficult to sell a home.
Nela Richardson, chief economist for Redfin, told Bloomberg that any slowdown in price could hinder underwater homeowners.
"So many people bought during the peak of the boom that they still have very low equity in their home," Richardson said. "They need prices to go up even further because they bought or refinanced at top of the mountain and we haven't reached those heights."
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