While we aren't heading toward a boom, the national housing market is showing possible signs of growth. According to an article on Fortune.com writing by the National Association of Realtor's Deputy Chief Economist Jessica Lautz, there are early signs the housing market might start moving. "Mortgage rates have ticked down modestly from their peak, and affordability has improved for eight consecutive months, supported by income growth outpacing home price gains," she writes.
The biggest issue still remains housing supply at the entry-level of the market. Affordable, entry-level homes are still limited, making it difficult for many buyers to break in. At the same time, the "lock-in" effect continues to restrict inventory. Homeowners with mortgage rates below 4% are reluctant to move into a higher-rate environment, even when life changes might otherwise prompt a move. According to Lautz, "The share of homeowners with mortgage rates below 3% is now on par with those holding rates above 6% — a shift that could gradually reduce the intensity of the lock-in effect over time." That is great news. Hopefully life changes will trump mortgage rates and we will see things open up.
