According to the April 18 financial release by Freddie Mac, the low inventory levels are continuing to push prices up and there's concern because the rise is outpacing job income growth. They reported that for the month of March, higher home prices combined with higher interest rates decreased affordability.
Many statistical reports, including our local reports, are showing a particularly dramatic decrease in the inventory of starter homes. According to the report, the number of starter homes for sale is at the lowest level in over 10 years. While it's good news that building permits are increasing, they are not expected to keep up with demand. This is true of our local market as well, where new building permits are not sufficient to keep up with the demand.
The report explains the reasons for the low inventory level by citing four different factors:
Fear of moving — people are afraid to move and put their homes on the market because of the uncertainty of being able to find a replacement home.
Mortgage rates — as mortgage rates rise, people are less likely to move and prefer to keep their lower interest rate.
Home Prices — although home prices are rising, for those who bought at pre-meltdown levels, the prices are not quite yet high enough to pay off what they owe.
Housing Starts — Freddie Mac states that the projected 1.26 million starts nationwide will not be sufficient to meet the 1.7 million projected need.
The good news for April is that mortgage rates have been decreasing, but the lower inventory is pushing up prices not just here in Bend, but almost all across the nation. I do agree with the report that 2016 will go down as housing's best year in the past decade.
Source: Freddie Mac
60982 Honkers Ln., Bend, OR 97702
3 beds, 2 baths, 1,032 square feet, .15 acre lot
Built in 2003
Listed by The Associates Realty Group
63325 Boyd Acres Rd., Bend, OR 97701
3 beds, 2.5 baths, 1,901 square feet, .14 acre lot
Built in 2015
Listed by Homesmart Central Realty
3492 N.W. Braid Dr., Bend, OR 97703
3 beds, 3 baths, 3,418 square feet, .52 acre lot
Built in 2004
Listed by John L. Scott Central Or Bend
Photos and listing info from Central Oregon Multiple Listing Service