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Many U.S. homeowners could sell their houses at a hefty profit but are unwilling to do so if it means entering the frenzied housing market, engaging in bidding wars, and paying top dollar for a new home, the Wall Street Journal reported.
As a result, people are living in their current homes longer than usual, shrinking the number of available homes for sale as Baby Boomers retire in place and younger families decide they are unable at present to afford a larger or better home.
The number of homes on the market on 1 May was 20 percent fewer than a year earlier and the number of existing homes for sale fell to record lows earlier this year.
“Even with low rates and the appreciation of their home, they can’t find something better than what they live in right now,” Thaddeus Wong of Chicago brokerage “@properties” told the WSJ.
The shortage has forced the median price of a U.S. home to a record $341,600 last month, shrinking, even more, the pool of buyers who can qualify to buy a house.
Economists think the shortage will continue, driving prices even higher as builders face shortages of materials and buildable lots, the WSJ reported.
The shortage of affordable homes remains most acute at lower prices.
TREND FORECAST: As we predicted in our 25 May article, “HOME SALES FALL AS INVENTORY DRIES UP, PRICES CLIMB,” the housing market will stay hot as long as interest rates stay low.
When there is a strong indication the Fed will raise baseline interest rates soon, buyers will storm the market with applications to try to beat the rise. That final surge will signal the end of the housing boom.