Inventory Levels on the Rise as Sellers Gain Confidence
Daily Real Estate News | Wed, June 12, 2013
Forty percent of Americans say now is a good time to sell a home — up from 30 percent last month and 16 percent just one year ago, according to a new survey by Fannie Mae. Rising home prices are helping to boost sellers’ confidence.
"Sentiment toward selling a home appears to be catching up with the strengthening housing market," says Doug Duncan, chief economist at Fannie Mae. “This jump may foreshadow a gradual return to more normal levels of housing supply from their lows of recent months. In turn, increased housing supply could serve to temper increasing consumer home price expectations.”
With confidence increasing, more sellers are listing their homes and inventory levels are rising in many markets. Inventory levels are up nationally 4 percent in April over the prior month, but in some markets inventories have soared even higher. For example, California municipalities Stockton and Sacramento have seen inventories rise more than 75 percent in April from the prior month, according to realtor.com® data.
As the number of homes for sale increases, "homes are starting to sit a little bit longer," says Joanie Cubias of Lyon Real Estate in Sacramento.
Still, in markets where a large number of home owners remain underwater on their mortgage, inventory levels remain low. For example, in Phoenix, inventory levels as of June are at the lowest point than at any time in the previous 13 years. While Phoenix has had a 19 percent yearly gain in home prices, prices still remain far from their peak and many owners still owe more on their mortgage than their home is worth.
The Fannie Mae survey found that 50 percent of Americans say they believe it would be difficult to get a mortgage, while fewer Americans this month — 46 percent — say they think it would be easy. The survey also found that more Americans — 46 percent — believe mortgage rates will increase soon.
"We will closely watch the potential impact of rising mortgage rates on consumer housing sentiment in the coming months," Duncan says.