2017 has started off with fierce competition among buyers for a limited number of homes. As has been the case throughout this housing cycle, for sale new construction remains extremely low. With little new for sale housing being built, this has created intense pressure on existing homes to satisfy buyer demand. Add the new sense of urgency from buyers, brought on by increasing interest rates, to the already low inventory levels and you have an extremely competitive market for buyers.
There may also be a silver lining for the housing supply in the rising interest rates . While rising interest rates will decrease affordability for home buyers, they will also increase long term carrying costs for developers. As rates increase some new developments may start making more sense as condo projects, as opposed to rental projects. Unfortunately, this new supply would come at an increased financing cost.