Two major factors will affect homebuying and selling this spring -- mortgage rates that are now rising, and fewer homes available for sale.
According to Mortgage News Daily, the average rate on the popular 30-year fixed is up 4.25 percent since the start of 2018, and experts anticipate they will continue to rise as the Federal Reserve raises rates. CNBC reports that there are 10 percent fewer homes for sale compared with 2017. In the markets with the fastest-appreciating prices, there are up to 40 percent fewer homes for sale, according to Zillow. Both factors will intensify competition on the housing market.
"The market is starving for new homes, but it won't be easy for builders struggling with high and rising land, labor and lumber costs," said Aaron Terrazas, senior economist at Zillow. "Aging millennials and young families may be able to find more affordable new homes for sale this year, but they'll most likely be in further-flung suburbs with more grueling commutes to urban job centers."
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