Fewer Homeowners Are Selling:  The number of homes for sale is down 28.4% compared to a year ago, according to realtor.com® data. Two years ago, before the COVID-19 pandemic, the number of active listings was 60% higher than today.

Winter months tend to be slower for the housing market as fewer sellers list homes. But this winter, inventories have fallen more than normal.  Economists downplay the effect of the pandemic, particularly the omicron variant, as the culprit. Instead, they say homeowners are hesitant to sell because they’re concerned about having to buy a new home themselves. That has prompted many to delay their selling plans, even as they watch the growing amount of equity in their properties.  More than one in four potential sellers recently surveyed said they were choosing not to sell in the near term because they couldn’t find a home they wanted in their price range.

Over 40% of Homeowners Are Equity-Rich:  Homeowners are continuing to see the values of their homes grow, leading to a rapid increase in the equity they hold in their properties. About 42% of mortgaged residential properties in the U.S. were considered equity-rich in the fourth quarter of 2021.  In the fourth quarter of 2020, the percentage of equity-rich properties was 30.2%.  The largest improvement in the share of equity-rich homes was across the Western and Southern states. 

Rising Rents Add Pressure to Buy:  Many renters are making moves toward homeownership as quickly rising mortgage rates and rents have them feeling increased pressure.  Average monthly rents climbed more than 14% year over year in December 2021.  Miami and Austin, Texas, have seen rents surge more than 30% over the past year.  Some renters may find a mortgage payment, with still historically low interest rates that are under 4%, may cost them about the same as or less than their increased rent costs. 

Buyers Rush to Lock In Rates:  With mortgage rates are on the rise, buyers are watching them closely—and nervously. Their anxiety may be intensified by the rising costs of home prices.  For these buyers, the peace of mind of a long rate lock may be worth the extra cost to hold that interest rate.  Buyers are also looking at buying down their interest rate by paying points to get a more attractive rate.  One discount point, in general, costs 1% of the total mortgage and could lower the interest rate by around 0.25%. Purchasing points could save tens of thousands and even hundreds of thousands of dollars over the life of a loan, lenders say, for buyers nervous about rising rates.  NAR predicts the 30-year fixed-rate mortgage will rise this year and average 3.9% by the end of the year.

Competition Remains Unseasonably Strong:  Homes are selling even faster than they were at this time last year as buyers continue to compete in the housing market. Housing inventories are lower as well, down 28% from a year ago. Seventy-nine percent of homes sold in December 2021 were on the market for less than a month, according to the National Association of REALTORS®. Properties typically remained on the market for just 19 days in December.  As rents rise at a double-digit pace, renters are looking to homeownership for the safety net of a steady mortgage and hopes of long-term appreciation. Mortgage rates that remain under 4% are also an incentive.  Housing indicators point to additional sellers entering the market this spring.

5 Kitchen Trends to Watch:  According to Houzz.com’s 2022 Kitchen Trends Study, the following are the top 5 homeowners kitchen make over trends:  1. Quartz countertops dominate  2. Supersized kitchen islands   3. Vinyl flooring is a growing choice  4. White and gray are the top color choices  5. High-tech appliances.