For Buyers Laura Miller Edwards Realty Group September 20, 2023
One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.
One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below shows new construction for single-family homes over the past five decades, including the long-term average for housing units completed:
For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while new home construction is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight.
There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps illustrate just how many homeowners may find themselves in this situation:
Those homeowners need to remember their needs may matter just as much as the financial aspects of their move.
Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction.
If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.
The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, let’s connect. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in our area.
This blog post previously appeared on https://www.simplifyingthemarket.com/en/2023/09/14/why-is-housing-inventory-so-low?a=106260-312309902871c1f0d820820f58bf8fde. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Stay up to date on the latest real estate trends.
If you’ve been considering buying or selling a home this year, you’re probably curious about what the election might mean for the housing market – and if it’s still a … Read more
Selecting the right real estate agent can make a world of difference when buying or selling a home. But how do you find the best one?
In today's housing market, many sellers are making a critical mistake: overpricing their houses.
There’s big news for mortgage rates. After the latest reports on the economy, inflation, the unemployment rate, and the Federal Reserve’s recent comments, mortgage rat… Read more
Today’s headlines and news stories about home prices are confusing and make it tough to know what’s really happening.
If you’re thinking about selling your house, you should know there are buyers who are ready and able to pay today’s high prices. But they want a home that’s move-in r… Read more
If you’re trying to decide if you’re ready to buy a home, there’s probably a lot on your mind. Here are a few questions that can give you clarity on whether you’re rea… Read more
If your listing expired and your house didn’t sell, it’s totally natural to feel a mix of frustration and disappointment. And as you’re working through that, you’re pr… Read more
While you may have a general idea of what an inspection is, maybe you’re not sure why you need one or how it’s different from an appraisal. Here’s an explainer of each… Read more
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact us today.