Buying a home in today's real estate market is not an easy task, especially when we look at property prices. In June, the median price of an existing home sold rose to an all-time high of $ 363,300. And it's not surprising that affordability issues are forcing many potential buyers to rethink their plans.

Why are houses so damn expensive? A big part of this is that mortgage rates have historically been very low, so there is great demand from buyers. This demand, in turn, leads to bidding wars, in which multiple buyers keep coming back with higher bids for the same property in the hopes of getting an offer accepted.

There is another reason for the high home prices: there has been a shortage of available real estate for months. Many sellers have been reluctant to list their homes during the pandemic, and prices can go up every time there is more demand for a particular commodity than is available.

However, the housing stock increased somewhat in June. At the end of the month, 1.25 million apartments were for sale, which corresponds to an offer of 2.6 months. This was a slight improvement over the 2.5 month offer in May. And if inventories keep improving, it could cause home prices to finally fall.

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A good sign for buyers?

The 2.6 month supply of home for sale in June is an improvement on the numbers we saw earlier this year. But to be clear, it is still not a particularly healthy housing offer – at least not in the context of creating an even housing market where neither sellers nor buyers have a clear upper hand.

In order to create this balanced housing market, it usually takes a 4 or 5 month supply of apartments so that there is enough inventory for the people who want to buy. Given that the housing stock only increased from 2.5 months in May to 2.6 months in June, we shouldn't expect the supply of available housing to increase overnight. This means that buyers may still struggle with inflated house prices for several months before enough inventory hits the market to cause those prices to drop.

Still, at this point, buyers should be grateful for any increase in inventory. And with sellers still a few months to take advantage of the milder weather, we could bring more homes to market in the short term before the winter slows down.

Of course, today's buyers can still face a shortage of affordable housing in their preferred neighborhoods. And they may have to put up with taking out higher mortgages to swing the homes they find.

Mortgage rates are likely to stay low not just for the rest of the year but well into 2022, so it could be in the best interests of buyers to pause their home hunting and wait for stocks to see past the modest improvement in June attract. Holding out for several months could mean the difference between paying a high home premium or spending much less.

source https://seapointrealtors.com/2021/07/24/housing-inventory-was-up-in-june/

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