Realtors may find themselves selling houses that aren't yet in existence, as the demand for homes rose above inventory in May and June, prompting buyers to purchase homes prior to being built. House builders now find themselves in an advantageous position, with lots of work on the horizon.
Real estate property records from the past two months show that 36 percent of homes sold across the nation had not yet begun construction, according to Bloomberg. The anticipated increase in building has experts speculating an improved economy as a result, since housing starts require the purchase of cement, lumber, furniture and appliances.
"There's clearly more housing starts activity in the pipeline," Neil Dutta, head of national economics at Renaissance Macro Research, told the news source. "The economic outlook is getting better and there's more household formation. With demand rising, production is going to follow."
The current disparity between supply and demand in real estate will likely fuel and strengthen the economy. The housing market's contribution to gross domestic product may uptick to roughly 0.6 percent in the future, Dutta told the source. However, it appears that builders are still facing roadblocks to construction, as they struggle to gain access to the resources necessary to home building. It was reported that land, workers and materials were of limited supply, but David Crowe, chief economist for the NAHB, said that he expects these obstacles will work themselves out.
Property data survey sheds light on recent demand
An anticipated uptick in mortgage rates has prompted potential home buyers to act fast, according to Fannie Mae's National Housing Survey. Of those surveyed in June, 57 percent noted that they anticipate an increase in mortgage rates over the next year, an uptick from last month's 11 percent. Mortgage rates have been very favorable in recent months, but a spike in June has buyers jumping to take advantage of rates while they are still relatively low.
Another possible factor in the willingness of buyers to purchase homes that don't yet exist is the improved attitude of consumers in regards to their financial situation. The survey revealed that 46 percent of respondents felt that their finances would improve in the next year, a statistic that hasn't been met since June of 2010.