Home inventory across the nation will likely remain low in the near future, reports the Denver Business Journal, keeping property values strong.
The Journal offered several reasons for the inventory numbers.
First, homeowners who secured lower mortgage rates in the past are staying in their homes longer. “[W]e’ve seen people who are staying put, living in their homes longer, renovating instead of moving,” Lisa Sturtevant, chief economist for Bright MLS Inc, told the Journal.
Taylor Marr, deputy chief economist at Redfin Corp., agrees, noting that homeowners who bought or refinanced their homes at or below a 3% interest rate are less likely to list their homes. “Interest rates would have to fall in order to incentivize a lot of homeowners who are sitting on sub-4% rates to come back into the market,” Marr told the Journal.
Additionally, as buyers drop out of the market due to high mortgage rates, homeowners are less eager to list their homes. They fear that their homes might not sell quickly due to lower demand.
In fact, the Journal notes that a recent small uptick in inventory is because houses are remaining on the market longer than they did in 2021. New listings are actually down 20% nationwide.
“Houses are now sitting on the market, on average nationally, about six weeks,” Marr told the Journal. This means that buyers’ ability to negotiate a favorable contract should be improving. “There’s definitely some more room for leverage on the part of buyers in this transitioning market,” Sturtevant told the Journal.
Sturtevant predicts that inventory will remain low for the next three to eight years.