Numerous challenges for homebuyers this spring season
While demand for homes has remained red hot, market conditions have slowed the pace of sales nationally compared with a year ago. Below are some facts and figures that show what prospective homebuyers are up against.
— Just 870,000 homes were on the market as of the end of February, just above the record low set a month earlier, according to the National Association of Realtors. That amounts to a 1.7 months’ supply.
— Despite the softer sales, the imbalance between supply and demand has pushed up prices. The median U.S. home price jumped 15% in February from a year earlier to $357,300, according to the National Association of Realtors.
— Buyers are expected to not only come up with a sizable down payment, say 5% to 10% at least, but also money to cover a “home appraisal gap.” This has become more common as bidding wars push up the sale price on a home above its appraised value.
— An average of 16% of homes sold in January and February for more than their appraised value, according to CoreLogic. The average for all of last year was 15%, up from 9.5% in 2020. The historical norm is 7%.
— The average rate on a 30-year home loan has climbed to around 4.7% from just above 3% a year ago, according to mortgage buyer Freddie Mac. Besides raising costs for homebuyers, higher home loan rates can also dissuade some homeowners from selling, especially if they’ve bought or refinanced their home when mortgage rates fell to new lows early last year.
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