Interest rate rise is not the biggest concern
The Fed begins its 2-day monetary policy meeting Tuesday with the latest announcement on interest rates due tomorrow. The likelihood of a rise this month has slipped in recent weeks but even if it does happen, most Americans are not too worried.
In fact, a poll by Trulia has found that 30 per cent are concerned about finding a home this year due to tight inventories in many markets. That compares to 20 per cent who are fearful of mortgage costs rising before they are able to buy.
“Consumers are increasingly worried about tight inventory when finding a home, and rightly so,” said Ralph McLaughlin, chief economist at Trulia. “Low inventory has been, and will continue to be, a strong headwind for house hunters, and impacts their ability to buy a home much more than increases in mortgage rates.”
In its latest analysis of inventory, Trulia found that availability of starter homes is down 43.6 per cent over the last four years while trade-up homes inventory is down 41 per cent.
Most people believe this delays homeownership
Student debt is a key factor in Americans delaying the purchase of a home according to a new survey by The National Association of Realtors.
It found that 73 per cent of respondents say that repaying their student loans on time has stopped them becoming first-time home buyers with more than 5 years being the most common expected postponement.
"A majority of non-homeowners in the survey earning over $50,000 a year reported that student debt is hurting their ability to save for a down payment," NAR chief economist Lawrence Yun said. "Along with rent, a car payment and other large monthly expenses that can squeeze a household's budget, paying a few hundred dollars every month on a student loan equates to thousands of dollars over several years that could otherwise go towards saving for a home purchase."
Almost half of young millennials surveyed still live at home with 42 per cent citing student debt as the main reason for delaying leaving the nest.
Student loans are also impacting existing homeowners with 31 per cent saying that they would like to sell their current home and buy something new but their student debt is delaying that.
Maryland home sales up 15 per cent
Home sales increased 15.6 per cent in Maryland in the year to May 2015 while average and median prices were up 1.7 and 2.6 per cent respectively.
The Maryland Association of Realtors says that the overall trend for the market is positive. “The hallmark of the 2016 residential market is stability,” said MAR President Bonnie Casper. “Pending units were up by almost 8 percent in May, which certainly indicates continued increased home sales.”
The disparity in sales ranges from a 30.9 per cent drop in sales in Allegany to a surge of 115.8 per cent in Kent.
The average price statewide was $322,253 while the median price was $282,257 in May.