New home purchases in April increased by 30.8%

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Home purchases have gone up, but that’s not all.

Spring is usually a popular time to buy a home and this is usually when the real estate flood hits the market. According to the Association of Mortgage Bankers, mortgage Applications for new home purchases in April 2021 increased by 30.8% over the previous year. However, compared to March 2021, the number of mortgage applications decreased by 9%. And the reason is not a lack of demand, but that lack of inventory

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The house is simply not enough to buy

In late April, Black Knight reported that there were 40% fewer homes on the market compared to the same period a year earlier. Overall, this left about 125,000 homes on the market for buyers to buy.

The apparent lack of inventory is causing a number of problems besides limiting the choice of buyers. First, combined with low mortgage rates, this leads to higher home prices. Secondly, it creates a situation where a limited number of houses, are on the market are being phased out depending on bidding war… While bidding is a great thing for sellers, it can lead buyers to spend their budgets trying to get the offer accepted.

Should you be trying to buy a home today?

If you’ve been looking for a new home, you may be getting increasingly frustrated trying to navigate an extremely narrow market. So for now it would be a good idea to pause home search and wait for the inventory to open.

The usual spike in housing inventory in the spring has simply not happened this year. And the pandemic may be to blame for this. At a time when the world is still in economic uncertainty, many sellers are refraining from listing their homes.

Health problems are also an important factor. Most people who buy a home don’t want to do it just on the basis of a virtual tour. Rather, they need to come in and physically check various properties. But some homeowners may not yet like the idea of ​​strangers roaming around, especially those who are not yet fully vaccinated against COVID-19. Thus, the housing market this spring is much empty than the regular markets.

However, this could change when the pandemic and the economy improves. Once that happens, housing stocks are likely to increase. If you sit for a few months, you can save yourself a serious flare-up.

Now you might be thinking – what about interest rates? The good news is that mortgage rates are likely to remain low for some time, so if you wait a few months to buy a home, you don’t necessarily get stuck with a rate much higher than what you would pay today.

While home purchases may have risen in April from the previous year, it is not surprising that they fell from March. Buying a home last month was no easy feat, and if you’ve been struggling to find your own spot, waiting out might be your best move.

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