Strong Demand Is 'Eating' Tight, Existing Supply on Housing Market

Existing-home sales went up 0.5 percent in December 2017 from November 2017, but the supply of homes for sale at the end of December fell to the lowest level since 1999, according to the National Association of Realtors.

New listings are ahead of the busy spring market, however, experts say this will not meet the "pent-up" demand, per CNBC. According to Redfin's monthly demand report, the number of buyers requesting tours from the brokerage was up nearly 17 percent annually, though the number of hopeful homebuyers making offers dropped roughly 6 percent. "Buyer demand is still strong, but wilted a bit in the face of low inventory," said Redfin's chief economist, Nela Richardson. "The housing market ended 2017 with 170,000 fewer listings than it had a year earlier. For the fourth consecutive year, inventory will be the major factor shaping the housing market in 2018."

"You may get some benefit from the tax bill if builders expand on the corporate side, but it is going to be offset by an increase in incomes for entry-level folks that will touch the demand side of the curve," said Doug Duncan, chief economist at Fannie Mae. "We are not seeing a lot of shift in the supply-demand balance for next year making it tougher for entry-level borrowers."

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