We have seen an enhancement in
remodeling over the past year as new structure languished. But America is still
experiencing one of the most severe downturns in the housing market in recent
memory.
One of the most complex barriers to
completing residential real estate transactions in today’s marketplace is the review.
Rising inventories also are pushing the overall
supply of homes for sale toward a more unbiased market, with unsold inventories
6.5 percent higher than a year ago. Inventories are at their peak level in over
a year and price gains have slowed to much more welcoming levels in many parts
of the country.
Slow-Moving
New-Home Construction: While overall housing inventories showed
improvements, inventory problems continue to weigh on the market and could
become more difficult if new-home construction doesn’t increase in more markets.
New-home construction needs to rise by at least 50 percent for a complete
return to a balanced marketplace.
Latent wage
growth: Stagnant wage growth is holding back what should be a
stronger pace of sales. However, the lack of wage increases is leaving a large
pool of potential home buyers on the sidelines who otherwise would be taking benefit
of low interest rates. Income growth below price appreciation will hurt
affordability.
Declining first-time home
buyers: The percentage of first-time buyers continues to be low by
historical values. First-time home buyers made up 28 percent of the market, downward
from a typical 40 percent of the market previously.
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