PROVIDENCE, R.I. (WPRI) — Housing inventories have been declining for months and it’s making it harder than ever for buyers to afford a home.
Providence ranked third in a recent study of major cities and the number of homes for sale compared to two years ago — a nearly 62% decline in listings.
“We have the lowest inventory since we have been keeping records and it’s really challenging for buyers,” R.I. Association of Realtors President Agueda Del Borgo said.
The good news for those who currently want to sell a home in Rhode Island right now is that if it’s priced right, it probably won’t take that long. In February, the average time for a house to be on the market was 39 days.
For anyone who wants to find something to buy, it’s slightly more challenging.
“There are more buyers on the market than ever before and additionally we have the lowest inventory, it’s definitely a seller’s market,” Borgo explained.
The Real Estate Market is cyclical, but what is currently going on is a cycle that hasn’t been seen in quite some time.
According to Rhode Island Living, in February 2012 there were over 5,200 single-family homes for sale in Rhode Island, in February 2017 there were 3,097, in February 2021 there were 1,137, and last month there were only 789.
It’s a challenging time, especially for first-time homebuyers.
“It is a patience thing and life is cyclical just like anything else and the real estate market is the same and they can be creative maybe a family gift to improve their chances of buying,” Borgo said.
While the demand for a single-family home is high nationally, locally, there has also been an increase in condo sales because there’s more supply and a condo’s sales price is lower than that of a single-family home.
“We are seeing a lot more multi-generational folks living together and pooling their resources in order to buy two or three families so that’s the market that we really have seen such an uptick,” she continued.
Two weeks ago the Federal Reserve approved the first rate hike in more than three years, with more hikes expected in the coming months.
With inflation, interest rates, and home prices rising, Tess Leighton, a market leader with Movement Mortgage, reassured that it’s not time to panic.
“We are actually coming off the best two years in the mortgage industry and what people don’t understand is we are profited to have the third or fourth best year of all time in the mortgage industry,” she explained.
The rate hikes will eventually mean higher loan rates for many consumers and businesses.
“So they are still in the 4’s right now and they are predicted to stay around the 4% range this year that’s extremity low comparatively, 2 and 3% rates, those are magic rates,” Leighton said. “They probably will never go back there, however, we don’t know what is going to happen, but 4 percent is an extremely strong rate right now.”
Record-low inventory to try and sell homes is also having a major impact on those who sell homes for a living.
“We have currently more relators than ever before, approximately 6,500,” Borgo explained. “Sometimes it looks a little more lucrative than it may be, and like anything else, if you’re in it for the long haul you have to weather the storm and just keep at it. And we are going to get on the other side of this just like anything else.
According to Bloomberg, last week the average rate nationwide for a 30-year fixed loan was 4.42%, which is the highest its been since January 2019.