Numbers, Math, & Observations
We had a great deal of interesting information in the January housing report. Some of it makes complete sense, while other data is interesting. Existing Home Sales were up 6.7% in January, and it is estimated that there will be 6.5 million units sold in 2022. While forecasting sales for new construction is a bigger challenge given labor and supply chain issues, the purchase market looks strong even in the face of rising interest rates.
Many site inventory as a challenge, I believe that inventory is more of an excuse than a reason. While many believe inventory is a critical component in the market, the old thought process that a six-month supply of homes for sale as a neutral market must be reviewed as a key measure. Since we are seeing solid sales, we must accept the thought that housing doesn’t sit on the market. In fact, the average home is on the market only 19 days. This is a far cry from when homes could take six to eight months, or more, to sell. The fact that we still see multiple offers, that about 50% of the homes going to contract are seeing offers OVER asking price, and that people are still making offers time and time again shows that people want to buy homes!
I know many people get frustrated and think about giving up; but think about it for a minute, in the attempt to buy a house, people are making offers on two, three, four, or more homes they would find acceptable to buy. If they stick with it, they eventually get their offer accepted. You can’t win if you stop making offers! It’s not about inventory, it’s about making the effort! So, make sure your people are in the best possible position to make the best possible offer as soon as they see a home they like. They may not get that offer accepted, but they will find a house if they set the proper expectations and keep at it. It’s all about the effort, NOT about the inventory. You only need to buy ONE house!
There are important economic news events happening Thursday and Friday that could rattle an already shaky market, so please pay attention!
On Friday, February 25th at noon eastern time, I will be a guest on the Mortgage Coach call with Dave Savage and the rest of the Mortgage Coach Team. Please join in for the call or be sure to watch the call on YouTube® on the Mortgage Coach channel. I will post the call on my website: IMTcoaching.com and the IMT Coaching YouTube® channel as well in the coming days.
Questions or comments: [email protected]
