Low inventory is the foremost issue in the housing market, with no let-up in the impossible demand for the few reasonably-priced homes available for sale. Supply shortages, according to at least one constituent, are now the No. 1 barrier of entry for homebuyers.
Fifty-eight percent of mortgage professionals recently surveyed by the National Association of Mortgage Professionals (NAMB) cited low inventory as the biggest hurdle for homebuyers today, compared to the far-flung 18.5 percent that pointed to the down payment, as well as 7 percent that reported credit, as an obstacle. Supply is especially challenged in California and Texas, with 73 percent of mortgage professionals in California and 58 percent of mortgage professionals in Texas saying limited listings are the primary impediment to home-buying in their state.
Other members of the industry have made similar observations. REALTORS® surveyed in the National Association of REALTORS® (NAR) Member Profile attributed transactions lost to “difficulty finding the right property” and “housing affordability,” while 62 percent of real estate brokers surveyed in RISMedia’s 2017 Power Broker Report believe scarce supply is currently their most pressing problem.
The inventory dilemma has overtaken concerns about mortgage lending standards, which, though to some are still too strict, have relaxed since the early, strong-armed days post-recession. In fact, according to a recent survey by Fannie Mae, more lenders have taken steps to open up access to credit since the start of 2017, and more plan to continue to do so in the future.
Coming up with enough money for a down payment has become less of a factor, according to the NAMB survey, but remains significantly tied to affordability, which is not only shrinking, but also shuttering dreams of owning a home—a mismatch in sentiment between homebuyers and the professionals that serve them. Tellingly, 70 percent of renters recently surveyed by Zillow are most concerned about saving for a down payment, not the lack of supply.
The discrepancy suggests a knowledge gap that both mortgage professionals and REALTORS® can fill. The industry’s emphatic perspective on inventory, as well, is a chance to inform—to remind buyers of the value of a professional, especially when faced with fast-moving supply.
Undeniably, there are few homes out there—but there are also many opportunities. How will you use today’s environment to your advantage?
Sources: Fannie Mae, National Association of Mortgage Professionals (NAMB)
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.
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