House sales continue to rise. This is due to the stock market being at a record high, and new jobs being created! This as well as rising consumer confidences and pent-up households, is helping sales of houses to rise. In 2017 it is expected that the number of sales of existing homes will rise about 3.5%, and an additional rise of 2.8% in 2018 (National Association of Realtors). This is causing a rift between supply and demand. More houses are in demand, but the supply of existing homes for sale are not there. Simply put “there aren’t enough homes for sale”.
Due to the lack of supply, sale prices are expected to keep rising. The National Association of Realtors predicts that prices will increase by 5% in 2017 and 3.5% in 2018. Even the prices in new builds are increasing. These houses can’t seem to be built fast enough. The prices for a new build is expected to rise by 10.7% in 2017, and 8% in 2018! New homes are typically more expensive to start with as builders must contend with rising cost of labor and materials, and shortages of land.
These numbers are resulting in buyers compromising on their needs and wants of a house. Some are purchasing homes farther away from the city, or settling for smaller homes. Some buyers who would like to upgrade a home are no longer able to afford it and are holding off as house prices increase.