Still not enough homes
If you are looking to buy a home, get ready to compete with other buyers this spring. The inventory of homes available for sale will likely continue to tighten, says Jonathan Smoke, chief economist at Realtor.com. In February, the number of home listings decreased 10.9 percent, compared with the previous February, according to data released by Realtor.com.
"Inventory is probably one of the biggest variables to potentially worry about holding back the market this year," Smoke says.
Locked in by low rates
That's especially the case for entry-level homes. The situation might worsen as mortgage rates rise and homeowners reconsider moving and losing the low mortgage rate they have locked long term, he adds.
"There's going to be a mortgage rate lock-in effect," Smoke explains. "People will become less likely to want to trade up because they won't be able to improve their position financially."
But the lack of inventory of homes for sale isn't a problem everywhere. Realtor.com says some growing markets where inventory has been increasing include:
- Detroit metro area, with a 5.7 percent increase in inventory from February 2014 to February 2015.
- Pittsburgh, up 3.9 percent over the same period.
- Jacksonville, Florida, up 3.3 percent.
- Indianapolis, up 1.9 percent.