Will the Housing Market Maintain Its Momentum?

Last week’s [Existing Home Sales Report](https://www.nar.realtor/newsroom/housing-market-reaches-record-high-home-price-and-gains-in-march) from the _National Association of Realtors_ (NAR) shows sales have dropped by 3.7% compared to the month before. This is the second consecutive month that sales have slumped. Some see this as evidence that the red-hot real estate market may be cooling. However, there could also be a simple explanation as to why existing home sales have slowed – **there aren’t enough homes to buy**. There are currently [410,000](https://cdn.nar.realtor/sites/default/files/documents/ehs-03-2021-single-family-only-2021-04-22.pdf) fewer single-family homes available for sale than there were at this time last year. Lawrence Yun, _Chief Economist_ at NAR, explains in the report: > _“The sales for March would have been measurably higher, had there been more inventory. Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”_ Yun’s insight was supported the next day when the _Census Bureau_ released its [Monthly New Residential Sales Report](https://www.census.gov/construction/nrs/pdf/newressales.pdf). It shows that **newly constructed home sales are up 20.7% over the previous month.** Buyer demand remains strong. With more of the adult population becoming vaccinated and job creation data showing encouraging signs, existing-home inventory is expected to grow in the coming months. #### **What will this mean for home sales going forward?** [_Fannie Mae_](https://www.fanniemae.com/media/38961/display), [_Freddie Mac_](http://www.freddiemac.com/research/forecast/20210414_quarterly_economic_forecast.page), and the [_Mortgage Bankers Association_](https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary) (MBA) have all forecasted that total home sales (existing homes and new construction) will continue their momentum both this year and next. Here’s a graph showing those projections:[](https://i0.wp.com/cherylbowerrealestate.com/wp-content/uploads/2021/04/20210427-MEM-Eng-1.png?ssl=1) ### **Bottom Line** Living through a pandemic has caused many to re-evaluate the importance of a home and the value of homeownership. The residential real estate market will benefit from both as we move forward. Posted in [For Buyers](https://cherylbowerrealestate.com/category/for-buyers/), [Housing Market Updates](https://cherylbowerrealestate.com/category/housing-market-updates/), [New Construction](https://cherylbowerrealestate.com/category/new-construction/)