In June 2016, a home went under contract, on average, in 41 days, according to real estate brokerage, Redfin. That’s the fastest turn since Redfin started to track the housing market activity in 2009, and four days faster than the same time last year.
In Denver, one of the most competitive housing markets in the country, half of the new homes being listed went under contract in six days. Seattle and Portland, Oregon, have the second fastest market, with a median of eight days from listing to contract.
The housing market is hot right now, and although buyers are reaping the reward of low mortgage rates, sellers are benefitting from the increased competition. The average sale-to-list price reached 95.5 percent, the highest ratio Redfin has ever recorded. Almost one-fourth of the homes—23.6 percent—were sold above the asking price.
Buyers are buying, but sellers aren’t stepping up to help increase the inventory. The gap between supply and demand for the housing market has widened. Redfin estimates the current housing inventory at 2.8 months, the lowest margin in seven years.
New homes are on the rise
While resale supply hasn’t been growing as quickly as it needs, new home construction has increased. Groundbreaking on new homes rose slightly in June as well—up 4.8 percent. The annual pace is at 1.19 million units, slightly higher than the projection of 1.17 million units.
Single-family homes represent the largest segment of new construction, and the U.S. Department of Commerce reports that the number of new homes being built has risen 4.4 percent. The Northeast is the most active region for new, single-family homes, with a 31.6 rise in starts this year.
If you’re considering putting your home on the market, now is a great time. If you’re ready to buy, be prepared to move quickly. Get your mortgage pre-approval completed. Connect with the new home builders in your area to see what’s available now and what’s in the works.
We know from experience that the housing market can fluctuate dramatically, and the low mortgage rates won’t stay low forever.