An acute shortage of homes for sell has been plaguing the housing market for the last couple of years with no end in sight. This historically low level of housing supply has driven up prices, leads to bidding wars and puts increased pressure on homebuilders to keep up with demand. The underlying issue behind all of this is that current homeowners are simply not listing their homes for sale.
Despite numerous polls that show many do have a desire to move, sellers are notably absent from the housing market but for a reason. A CoreLogic study shows that in the first quarter of 2018, 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less – this is below the current market average. Homeowners who sell and buy a new home would be giving up this low rate.
Additionally, a current homeowner looking to move would be entering the same housing market as everyone else; the one riddled with steep competition and hefty price tags.
Today, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.