Trade-Up Buyers May Be Waiting To Make A Move
The current real-estate market suffers from a lack of inventory. Fewer available houses for sale has led to higher prices and more competition for the homes that are on the market. Part of the reason for this is fewer new homes were being built in the years following the housing crash. But what about current homeowners? Why haven't more Americans been selling their homes and trading up in recent years? Well, according to Doug Duncan, Fannie Mae's senior vice president and chief economist, affordability conditions may have something to do with it. Their most recent Home Purchase Sentiment Index found high home prices to be the most commonly cited reason for why Americans felt it was a good time to sell but not as good a time to buy. “A contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market,” Duncan said. “Additionally, the shares of consumers citing favorable mortgage rates as a reason why it's a good time to buy or sell a home both dropped to fresh survey lows.” But though trade-up buyers have been hesitant to sell, recent data has shown an uptick in the overall number of homes available to buy, which could indicate that things are beginning to change. More here.