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Equity Poverty Keeps Inventories Begging

Equity Poverty Keeps Inventories Begging

Steady price increases driven by another season of inventory shortages has convinced a record number of consumers that now is a good time to sell a house.  Unfortunately, millions of homeowners are missing the opportunity.

A new Rasmussen Reports national telephone survey finds that 44pecent of American adults say it’s a good time for someone in their area to be selling a house.  That’s up from last month’s recent high of 38 percent and is the first time this number has broken the 40 percent mark in over five years of regular surveying.  Thirty-two percent (32 percent) don’t think it’s a good time to sell, the lowest finding to date.  One-in-four (24 percent) are not sure.  The survey of 1,000 American adults was conducted on June 13-14, 2014.

In its most recent price report, CoreLogic reported April prices are up 10.4 percent over the past year the 26 straight consecutive month where prices rose on an annualized basis.

Low inventories are lingering into the summer months despite rising prices.  “The dearth of homes for sale is the result of two phenomena: people buying homes at the peak of the housing boom, paying more for them than they are now worth; and, after the bust, people buying and refinancing homes at unsustainably low interest rates,” wrote Tommy Unger in the Redfin blog in April.

The same Rasmussen survey provides statistical support for Unger’s views.  The survey found that only 60 percent of American homeowners feel the value of their home is more than what they still owe on their mortgage.  That’s up slightly from 58 percent in May, but low enough to confirm that equity poverty is still a significant factor keeping prospective sellers off the market.  Twenty-nine percent—nearly a third of all owners-still say their home is not worth more than they owe.


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