![]() ![]() ![]() ![]() She wants a multifamily property in Hartford, Conn., so that her adult children can live with her but also have their own space. Winifred Jones has been going through the emotional roller coaster that is trying to buy a home for six years. The Federal Reserve has steadily raised interest rates in an effort to tame inflation, and Fed Chair Jerome Powell suggested, when testifying before Congress on March 8, that the Fed would likely need to continue to bring interest rates higher than originally anticipated. It’s something buyers across the country are going to reckon with as spring-the traditional home-buying season-approaches and mortgage rates continue to rise. “It’s stressful, it’s highly competitive, and it’s emotionally challenging,” he says, about buying a home right now. Three homes went into contract in Cincinnati in February for every new one that was listed, he says. “Institutional investors are…making this market more difficult,” says Peter Chabris, a real estate agent in Cincinnati, Ohio, where there is also very low inventory. ![]() Investors bought 24% of all single-family homes in 2021, up from around 15-16% each year going back to 2012, according to a Pew Stateline analysis. One other reason that there’s low inventory? The influx of investors who have bought properties, including single-family homes, to rent. Why That’s Bad for People Who Aren’t Rich As more inventory comes on the market, prices level off. That includes Austin, Nashville, and Dallas, for instance, three markets that saw prices jump in the last few years because there were bidding wars on existing homes. The current dependence on new construction means that markets where there has been a lot of building in the last few years have a lot more inventory. In 2021, the rate was more like one in four. has increasingly come to depend on new construction for inventory-one in three homes for sale right now is new construction, Fairweather says. Second, they’re places in the dense Northeast where there’s not a lot of land to build on, and so there’s not a lot of new construction happening. Koladis, the Hartford real estate agent, says she’s seen a lot of buyers relocate to Hartford from New York, New Jersey, and even California. Hartford Boston and Montgomery County, Penn.Īside from Boston, these regions aren’t the ones typically mentioned in the same sentence as “housing crunch,” but there are a few reasons that these Northeastern metropolitan areas are seeing such low supply, Fairweather says.įirst off, they’re seen as relatively affordable, so people who have been priced out of places like New York City are heading to smaller cities to be able to own a house. Rounding out the top ten were Grand Rapids, Mich. In January, according to Redfin, the places out of the top 100 most-populated metro areas in the country with the lowest inventory were Rochester, N.Y. There are factors at play that make some markets especially brutal. They have to choose between paying a high price for the inventory that is available, or waiting-potentially for a long time. The low inventory makes house hunting an even more painful and emotionally charged process than usual, because buyers are finding that there just aren’t that many options. That means that homeowners who bought or refinanced with low interest rates are reluctant to sell their homes and buy another with a mortgage with a much higher interest rate. Mortgage rates have skyrocketed since then-the rate for a 30-year fixed mortgage reached 6.7% on March 9, nearly double that of a year ago, according to Freddie Mac. One reason inventory is so low nationally is that many homeowners were able to lock in record low interest rates in 20. ![]()
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