Diana Olick is an Emmy Award-winning journalist, currently serving as CNBC's real estate correspondent as well as the author of the Realty Check blog on CNBC.com. She also contributes her real estate expertise to NBC's "Today" and "NBC Nightly News with Brian Williams."
Olick launched the real es...
Fannie, Freddie making billions-why shut them down?
Home prices continue to rise at a fast clip, faster than incomes and faster than new employment, but it is still cheaper to own a home than to rent. So why are home sales falling? Because there are crazy few affordable homes for sale. The supply of listings in April fell 9 percent compared with a year ago, and, in turn, the number of days it took to sell the average home dropped to just 29, the lowest since the National Association of Realtors began tracking that back in 2011.
Lower mortgage rates are helping more homeowners refinance and reduce their monthly payments, but they are not providing much incentive to homebuyers, who are finding very few affordable listings from which to choose. Total mortgage application volume increased 4.4 percent on a seasonally adjusted basis for the week ending May 19, compared to the previous week, according to the Mortgage Bankers Association. The gain was driven entirely by refinances.
Ask anyone house hunting this spring, and they'll tell you there are far too few homes for sale. But, really, it's the price tags of the homes for sale that are the issue. It seems like a very simple fix. Not enough homes? Build more. Builders are doing that, but they're not building the right kind of homes. Builders say they are now targeting the millennial buyer — launching new, slightly lower-priced brands and stripping down the models — but clearly, it's not enough.