What to Expect: Second Quarter Housing Trends
We are in the midst of the spring homebuying season, and the housing market continues to remain extremely competitive. If you’re house hunting and hoping to close within the next few months, it’s important to keep an eye on the trends.
What is making the home demand so high?
A decade of underbuilding:
With not enough homes to meet the demand, it may take years for the supply to catch up to buyers’ needs. In fact, according to the National Association of Realtors, the U.S. housing market is short of approximately 3 million available homes. This problem won’t be solved overnight, which means the low supply will continue trending throughout the second quarter.
Low supply and high demand will keep the market competitive, and realtors are reporting multiple offers on listings.
Sub-3% mortgage rates existed for months during 2020, which sparked the influx in home refinancing. Since early 2021, rates have been climbing, but whether they continue in that trajectory depends on the economic recovery. The coronavirus vaccine does bring some hope for the economy, which could cause more Americans, particularly baby boomers, to feel at ease listing their homes for sale.
As the rates continue upward, refinancing should slow down by the end of this quarter; however, rates might increase enough to discourage refinancing while remaining appealing to potential home buyers.
Lumber prices have increased by 300% over the past 15 months. Due to this increase in materials, home buyers should not expect to see home prices drop any time soon. Not only are material prices on the rise, but land and labor costs have increased as well. If the cost of the beams, rafters and flooring have risen, then you can expect the overall cost of the home to increase along with it. It’s reported that lumber prices have caused a $35,872 increase in the price of the average new single-family home.
“To illustrate how lumber prices are crippling the average home builder, the price of framing lumber at the beginning of May was nearly $1,500 per thousand board feet. That’s up more than 250% since April 2020, when lumber prices were roughly $350 per thousand board feet.” – Tim Glaze, HousingWire.
Tips for Home Buying and Selling in Q2:
- If you’re considering listing your home, you are at an advantage in this competitive market.
- If you’re looking to purchase a home, it is especially important to work with a trusted realtor who can guide you through the process and help prepare you for the competition.
- It’s vital to be prepared when house hunting. Homes are not on the market long, which means you need to have your ducks in order before your dream home even comes on the market.
Our agents at Points West Agency are ready to help you find the home of your dreams, so visit our Contact Us page or give us a call at (817) 717-6036 to get the process started.