A report from realtor.com suggests that housing shortages are likely to get worse over the next year.
The blame is being placed on a “housing shift” that will result in less homes being listed for sale, making it tougher for buyers to find a suitable home, even though the current low mortgage rates mean that this year is a great time to buy.
Danielle Hale, chief economist of realtor.com, told the Washington Post that housing inventory levels could return to near record lows in early 2020. She noted that in June, the number of newly listed homes fell by 2.3% compared to the year before.
That will come as a disappointment to economists, who had predicted that the housing market was likely to see inventory levels grow this year. New listings increased by 6.4% in January compared to the year prior, leading many to forecast a recovery in the housing stock. But since then, the rate of increase this year has slowed each month, becoming negative in June.
Hale said there were a number of reasons for the lower than expected inventory levels. These include a preference among baby boomers to “age in place” instead of downsizing. Other reasons include a lack of confidence in the economy, and “rate lock”, which refers to homeowners who bought their homes when the mortgage rate was lower than it is today. In such cases, homeowners are reluctant to sell up and obtain a new mortgage on their next property, as it would mean paying higher rates.