The latest MBA data shows that home purchase applications are down 18% which is causing the media to interpret this as bad news for housing. But what’s really going on?
When you take a closer look, cash buyers aren’t captured in the mortgage application data. When we figure in the big increase in cash buyers, there’s still a decline in the amount of purchase applications, but it’s not 18%, it’s 9%.
Plus, there are fewer homes available for sale because inventory is down 20% from a year ago. However, the demand for homes is very strong, and should continue to be strong because of very favorable demographics. It’s just more challenging to buy a home because there are more people looking to buy and less homes available. Plus, it’s even harder for builders to complete homes right now because the chip shortage is making appliances hard to deliver, too.
The high demand and tight supply should continue to be supportive of home price appreciation, plus with rates still historically low, there’s still a big reward for people ready to purchase a home.
Call me today so we can see how you can benefit from this opportunity.