Despite gains, low supply hampers home sales
Posted on Wednesday, March 25, 2015 at 8:21:47 AM
The number of existing-home sales grew between January and February, according to the National Association of Realtors. However, even with those gains, overall sales are being held back by a low supply.
NAR reported that limited inventory of homes for sale has kept growth down and helped contribute to higher home prices. Overall, total existing-home sales, including single-family houses, townhomes, condos and co-ops, increased 1.2 percent in February. Sales also ticked up 4.7 percent on a yearly basis, but this hasn't overshadowed the dwindling inventory.
"Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels," explained Lawrence Yun, NAR chief economist. "Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise."
While NAR showed that home prices are on the way up, Black Knight Financial Services reported that affordability is still high. The key reason for this is low residential financing interest rates, which have helped homeowners across the country.