New housing starts fell 4.7% in
September, the Commerce Department said, and remain about 40% below the 50-year
average, which is unusual considering the economy and job markets are expanding
strongly. In September, sales of previously owned homes declined on an annual
basis for the first time since July 2016 as the shortage of homes continues to
take a toll on the housing market.
Americans aren’t moving in part
because inventory levels have fallen near multidecade lows and home prices have
risen to records. Many homeowners are choosing to stay and renovate, in turn
making it more difficult for renters to enter the market.
Home renovation spending,
already at record levels, is expected to continue accelerating, according to
data released this month by Harvard University’s Joint Center for Housing
Studies. Total outlays on renovations are expected to grow 7.7% annually in the
third quarter of 2018, up from 6.4% in the third quarter of this year.
Investors snapped up
single-family homes during the downturn and converted them to rentals. While
some industry observers thought they would sell them as soon as home prices
recovered, a booming rental market has meant that most have held on to them. An analysis
by Trulia found that every one percentage point increase in the housing stock
owned by investors in a market was correlated with inventory levels that are
2.8% lower.
Locally here in Atlanta home listing inventory remain tight, especially for homes under 250k. Buyers constantly face multiple offers from cash investors and buyers with better financing profiles. Now for a successful home purchase, buyers will need a well planned buying strategy from the start.
