The Week Ahead: An Eye on Supply and Demand

On Thursday, Zillow will release its Real Estate Markets Report for March 2017.  The report covers several data points, including demand, home prices, inventory, and sales numbers. One thing to keep an eye out for in March is inventory levels.

The previous report, from February 2017, showed declining inventory overall, a problem further developed by high demand. Zillow reported that many homes are being bought nearly immediately after being listed in some markets, and new construction has been faltering for decades.

Additionally, negative equity has been pushing inventory down. Although the national negative equity rate has fallen consistently over the past few years, it still remains high at 10.5 percent. Zillow reported that in February 5.1 million homeowners were underwater, and would list their homes for sale if they could, but being underwater has held them back, making it near impossible to sell.

"Negative equity is one of the most persistent reminders of the long-term losses suffered when the housing market collapsed," said Zillow Chief Economist Dr. Svenja Gudell. "Accelerating home value appreciation over the past few months was a blessing to owners who have been underwater since the housing bubble burst, but not all underwater owners were able to ride that wave to positive equity. We are in for many more years of elevated levels of negative equity. Even as median home values close in on peak levels reached during the housing boom, some people still face a long wait before returning to a positive balance on their home loans."

Zillow also reported that homeowners themselves may have contributed to the lack of inventory by just not listing their homes for sale. Sellers can expect to receive their asking price relatively quickly, but then they would have to turn right around and become buyers themselves in the limited market. This leads many potential sellers to reconsider.

Zillow's report will release at 8 a.m. EST on Thursday.

 

This Week’s Schedule

Housing Starts Report, Tuesday, 8:30 a.m. EST

Freddie Mac Webinar: Learn About the New Servicer Success Scorecard Tuesday, 1:30 p.m. EST

MBA Mortage Applications, Wednesday 7 a.m. EST

Freddie Mac Weekly Mortgage Survey, Thursday, 10 a.m. EST