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Looking to Buy? Do Your Homework and Get in Line
So you’re looking to buy a home sometime in the next two years? Well, you’d better start lining up. Because you, my friend, are very far from alone.
Total home sales in April were up nearly 8% over last year, as the economy, lower mortgage rates, and demographics are working together to require, inspire, and enable the highest level of purchases since spring 2007. Yep, you read that right: the highest in eight years. But they should be even higher, because the number of actual sales will likely be nowhere near the number of people who are trying to buy.
While sales in April were jumping, more than 40 million people determined to buy looked at listings on realtor.com®, according to our survey data. If you assume that every purchase will involve two people, the amount of buyer traffic translates into 20 million potential home sales. Yet, at the current pace of sales, we will see only 6 million sales this year.
Why is that? First, the number of actual transactions we’ll see is clearly a function of supply.
Even if we had 20 million households ready and able to buy today, there is only so much inventory available. We would run out of the full stock of new homes and existing homes available for sale in 4.7 months at the current pace of sales.
And we also don’t have 20 million buyers looking to buy immediately. In April, 17% of buyers were looking to purchase within the next three months. Over half of active shoppers have a timeline of at least six months or more.
In other words, if you just started looking and won’t likely buy for at least six months, there are millions of people just like you. (Does this make you feel ever so slightly less special? )
The typical buying journey lasts three to nine months from beginning to end. But at any given time, you’ll find home shoppers at varying stages in that journey. In April, more than two-thirds of shoppers were in the first half of that trajectory. As the year progresses, we will see that statistic flip.
That means the market is not likely to slow down even after the peak buying season ends this summer. Instead, it is likely to get more frenzied in the summer because of more people reaching the latter stages of their journey and needing to close a deal.
Where you are in your journey influences what you do and the problems you face. If you are just starting, gathering information, figuring out your desired neighborhood, and looking at listings online consume most of your time. But as the journey progresses, you keep looking at homes for sale but you also spend time navigating through mortgage pre-approvals, working with Realtors®, and making offers.
In the beginning, finding time to figure it all out and saving for a down payment are the biggest hurdles. As you reach the final stages of the journey, the biggest issue in this market is actually finding a home you want (and can afford).
We’re here for you at whatever stage you might happen to be in your own journey. Since looking at active listings is the most popular activity throughout the process, our updated mobile app will keep you current. In fact, no site or app has all of the listings we have. And no other app is updated as quickly when listings change.
We also are the best place to learn about home buying and mortgages and to find an expert local Realtor to help you find that home.
And I’m here to keep you abreast of what’s going on in the housing market. Oh, and also to help keep you dancing to the hottest new hits.
The post Looking to Buy? Do Your Homework and Get in Line appeared first on Real Estate News and Advice - realtor.com.
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