This month, we examine how the housing undersupply contributes to increasing home prices, as well as the market effects of the large increase in mortgage rates since January.
Currently, the housing supply is so low that the demand far outpaces the number of homes on the market. The pandemic changed the direction of consumer spending from a focus on services to a focus on physical goods. It also accelerated the rate at which people built savings. With the addition of hyperlow mortgage rates, homebuying became more accessible to a higher number of people in 2020.
We expect housing demand to remain high for many years. Even as offices become safer, we anticipate people will continue working remotely, even if only partially. Increased remote work changed housing priorities, contributing to the increased demand. Additionally, as COVID-19 cases continue to decline and vaccinations increase, our futures look more certain. This means that the period of all-time-low mortgage rates is ending, which may boost demand even further over the next several months as buyers try to lock in low fixed rates.
As we navigate an ever-changing economic landscape, we remain committed to providing you with the most current market information so you feel supported and informed in your buying and selling decisions.
In this month’s newsletter, we cover the following:
- Key Topics and Trends in April: Low home supply will continue for the foreseeable future, increasing bidding wars and driving up prices. Mortgage rates have increased 50 basis points in less than three months as pandemic uncertainty wanes.
- April Housing Market Updates: Single-family homes are massively undersupplied relative to demand, causing prices to appreciate further. Condo prices remain stable.