Q: When will the number of homes listed for sale increase?
A: Great question! There are two main reasons inventory is so low: high-interest rates and economic uncertainty.
According to a recent Redfin report, 61% of Colorado homeowners have mortgage rates below 4%. With rates hovering around 7.0%, many homeowners don’t want to exchange their low-interest rate for a much higher one. This is known as the “Rate-Lock Effect.” Only 29% of homeowners don’t have a mortgage and are not impacted by current interest rates. Anecdotally, most of our clients selling this year do not have mortgages, so this tracks with the stats
With international conflict, a potential recession, and general economic uncertainty, consumer confidence is low. When consumers are cautious, they rarely make major life decisions (like moving).
Interesting to note, election years (such as 2024) generally have lower transaction volume, so inventory will likely remain low for at least the next couple of years.
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