One significant issue on homebuyers’ minds is this year: why is it so challenging to locate a house to buy? We’re in the midst of the ultimate sellers’ market, so purchasing real estate is tough right now. The number of purchasers looking for a house outnumbers the number of residences.
The problem of low housing supply has always been there, but it’s a problem that’s only getting worse. Here are two reasons why the housing supply is now limited and what this implies for you.
For several years, new home construction lagged.
The graph below depicts new single-family house development during the last five decades and the long-term average for housing units constructed. During the housing bubble, builders outperformed the average (shown in red on the graph). As a result of the surplus of properties on the market, property prices have fallen. One of the elements that contributed to the housing meltdown in 2008 was this.
The housing market and the pandemic
When the pandemic struck, it reawakened newfound respect for and attention to what it means to be at home. For Americans around the country, having a safe place to live, work, go to school, and exercise has become increasingly crucial. As mortgage rates fell to around or below 3%, purchasers rushed into the market, hoping to take advantage of the cheap rates and obtain a property that met their shifting needs. At the same time, as fears about the epidemic grew, sellers were hesitant to put their homes on the market.
If you intend to buy this year, keep in mind that inventory will still be lower than usual, even if it increases. Contact a local real estate agent today to discover more about what’s going on in your neighborhood, what houses are available, and why it’s still essential to prioritize your home search now.