The spring housing market has defied expectations this year, displaying remarkable levels of activity. Despite affordability hurdles and a limited inventory of available homes, buyer demand continues to grow stronger.
One key indicator of active buyers is the increase in showing traffic. The latest data from the ShowingTime Showing Index reveals that more individuals are actively touring homes compared to pre-pandemic levels (refer to the graph below). Although not reaching the buyer frenzy experienced in the past couple of years, the current showing traffic is not far behind. There is a significant number of interested buyers exploring available properties at present.
The question arises: Why are buyers so actively engaged, even with higher mortgage rates compared to last year?
Stronger-Than-Expected Job Market Growth Despite concerns about inflation, repeated hikes in the Federal Funds Rate by the Federal Reserve (Fed), and discussions of a potential recession, the job market continues to exhibit remarkable strength. Surprisingly, it appears to be getting even stronger (refer to the graph below).
Each month, the Bureau of Labor Statistics (BLS) releases data on new job additions to the U.S. job market. The graph above demonstrates that April saw an increase of 88,000 jobs compared to March, surpassing expert projections. This positive trend indicates significant growth in the job market.
Near-Record Low Unemployment Rate Contrary to expectations, the low unemployment rate witnessed in recent years has not raised inflation concerns mounted. In fact, the unemployment rate has reached a 50-year low of 3.4% (refer to the graph below).
With a substantial number of individuals stably employed and financially secure, many are seriously considering homeownership.
What Does This Mean for Sellers?
If you're planning to sell your house this year, the current market conditions with active buyers are highly advantageous. Your home will generate increased interest once it hits the market, particularly given the scarcity of available properties.
To embark on this journey, it is advisable to consult an experienced real estate agent. They will assist you in appropriately pricing your house, navigating offers, negotiating effectively, and minimizing stress and hassle.
Bottom Line There is a considerable pool of buyers actively searching for homes that meet their needs in the current market. This is primarily due to the strength of the job market and the financial stability of many individuals. To capitalize on this momentum and list your house, it is recommended to engage with a trusted real estate agent who can guide you through the process.
