The last few years of the real estate market have been characterized by low housing inventory says Realtor.com's Jonathan Smoke. Housing inventory has not exceeded 6 months worth over the last 47 months. But that makes demand even higher for potential home buyers.
The number of home buyers visiting realtor.com® in August was up 16% over last August. And yet the number of homes for sale was down 8% says Smoke.
However, buyers in August reported that low supply and high demand weren't their biggest challenge--it was time. Thirty-five percent of buyers said they had just started to explore so were not ready yet to buy homes, and 59% of buyers had been looking for less than three months.
Why? Smoke explains:
The high number of those just starting to dip their toes into the market this year is related to a sizable shift toward first-time buyers. Last August, 35% of buyers identified themselves as first-time buyers. This August, the share of first-time buyers jumped to 51%.
As a result, new challenges, mainly financial, are also emerging as more of a concern for the market. After all, the supply-demand imbalance has also been driving up home prices. This August, 9.4% of buyers reported having difficulty qualifying for a mortgage. That was up from 5.6% last year. The need to improve credit scores doubled as a problem from last year, increasing from 9.7% of all buyers in 2015 to 19.5% this August. And not having enough funds for a down payment? That rose from 16% last year to 25% this year.