The peak spring homebuying season started last month, yet buyers are not leaping into action. Pending home sales rose by only 0.4 percent in March from February, per National Association of Realtors' data.
NAR chief economist Lawrence Yun predicts that existing-home sales this year will total 5.61 million, or 1.8 percent more than in 2017. Median existing-home prices should rise about 4.4 percent, per CNBC. "Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory," said Yun, adding, "Steady price growth and the swift pace listings are coming off the market are proof that more supply is needed to fully satisfy demand."
The biggest challenge in today's housing market continues to be a severe shortage of homes for sale, especially at the lower end of the market, where demand is highest. There were about 9 percent fewer homes on the market in March compared to a year ago, pushing prices up 8 percent, according to Zillow. Home builders are also focused on the move-up, rather than entry-level market, as the cost of construction continues to rise.
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