The residential real estate market, now at its midpoint in 2015, is on track for its best year since the peak of the housing bubble in 2006, notes realtor.com® chief economist Jonathan Smoke. But as Smoke is quick to point out, this time it’s not a housing bubble.
That’s because job growth is fueling the most recent climb in demand for homes. More than 3 million jobs have been created in the past 12 months.
As job growth increases, demand has followed. Homes are selling more quickly. The median age of inventory from homes on the market nationwide in May was 66 days – eight days faster than last year. Some markets are even seeing inventory move in just 18 to 45 days too, realtor.com® notes.
“A rapidly declining age of inventory signals that demand is growing more rapidly than supply,” Smoke writes in commentary at realtor.com®. “Indeed, we’ve had 32 months in a row of existing-home inventory at less than a six months’ supply. That’s why we’re also seeing above-normal price appreciation.”
Median home prices rose 9 percent in April year-over-year. Home owners are seeing strong gains in equity lately.
At the real estate’s market current level of growth, total home sales this year could near 6 million, which is near the peak seen in 2006, Smoke notes.
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