Unless you live in a cave, (doubtful, since you are using the internet to read this), you know that there has been a slump in the current real estate market.  However, there is some bright news on the horizon.

For the past two months, the U.S. real estate housing market’s leading indicators are showing that inventory is on the upswing.  Home sellers are starting to ease back into the market, new listings are clearly exceeding the levels of a year ago.

We’re getting past the issue of homeowners with crazy-low rates not wanting to give that up if they purchase a new home.  As a result, we’re starting to see an increase in the supply of homes on the market.  This is a turnaround of the market from the smoldering ashes of the 2023 inventory crash.  It is definitely a positive development.

Although interest rates are much higher than the record low rates of two years ago, they have stabilized, and even dipped a bit recently.  As time passes, people are adjusting to the reality that we’ll probably not see radically lower rates in the foreseeable future.  The longer we stay with mortgage rates higher, the more inventory will build closer to where it used to be.

If mortgage rates fall into the 5 percent range this spring, you should expect increasing demand for homes, and more current homeowners willing to list their current homes to transition into a new home.  This can be a double-edged sword, since increased inventory could likely be outpaced by the increased demand.  A key element indicator to look for is new housing starts… Basically, new homes being built to meet the increasing demand for housing.

We’ll all be keeping a close eye on inventory and rates this spring.  If you’d like to receive free weekly market and rate updates, you can sign up for them on the Optio Financing home page.