According to a recent CNBC article, November housing inventory hit an all-time low for the month since the National Association of Realtors began tracking it in 1999. A lack of inventory is being seen in nearly all segments of the market (except high-end homes), but especially in lower-priced starter homes, which could make it difficult for first-time home buyers to find a home they can afford.
The low supply comes at a time when demand is increasing, in part due to falling mortgage rates, which started the year approximately 80 basis points lower than they were at the beginning of 2019. In addition, last year home prices across the country increased an average of 5%, according to the Federal Housing Finance Agency’s price index, which lead to an increase in loan limits backed by Fannie Mae, Freddie Mac and the Federal Housing Administration for 2020.
With both inventory and rates low, you’ll likely face increased competition if you’re planning to buy a house this year. But there are a few things you can do to help improve the likelihood your offer will be accepted.
- Get pre-qualified. It shows sellers you can afford to buy a house and a lender is willing to offer you financing.
- Don’t wait. If a house that looks promising comes on the market, schedule a showing right away. If it’s right for you, submit an offer as soon as possible.
- Start with your strongest offer. When inventory is low, it’s not uncommon for sellers to receive multiple offers on a property. So make your offer as strong as possible from the beginning because you may not get a second chance to negotiate.
With increased competition and home prices on the rise, act now to get ahead of the spring buying season. Give us a call to learn more or to start your application today.