I’ve been talking about how this is a supply constrained market… and finally now at the end of April as we see a little more inventory, the good news is that we’re seeing more purchases too. This seems to confirm my conclusion: more supply of homes for sale means more home sales.
This is notable because if you use mortgage purchase applications as a proxy for housing demand, you’re underestimating demand. Purchase apps are low relative to previous years. Fewer home sales are happening now. But the underlying demand is better. We have too few sellers. The quantity demanded is greater than the quantity supplied.
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