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Low home inventory in pnw12/20/2023 The result? The number of homes available for sale dropped even further. At the same time, sellers hesitated to put their houses on the market as concerns about the pandemic mounted. So, as mortgage rates dropped to at or below 3%, buyers eagerly entered the market looking to capitalize on those low rates to secure a home that would fulfill their changing needs. Having a safe space to live, work, school, and exercise became even more important for Americans throughout the country. Then, when the pandemic hit, it fueled a renewed appreciation and focus on the meaning of home. The Pandemic’s Impact on the Housing Market That underbuilding left us with a multi-year inventory deficit going into the pandemic.Ģ. For the last 13 straight years, builders haven’t been able to construct enough homes to meet the historical average ( as illustrated in green on the graph). Since then, the level of new home construction has fallen off. That was one of the factors that led to the housing crash back in 2008. The result was an oversupply of homes on the market, so home values declined. Builders exceeded that average during the housing bubble ( shown in red on the graph). The graph below shows new home construction for single-family homes over the past five decades, including the long-term average for housing units completed. New Home Construction Fell Behind for Several Years Here’s a look at two reasons why today’s housing supply is low and what that means for you. While low inventory in the housing market isn’t new, it’s a challenge that continues to grow over time. The number of buyers searching for a home greatly outweighs how many homes are available for sale. One key question that’s top of mind for homebuyers this year is: why is it so hard to find a house to buy? The truth is, we’re in the ultimate sellers’ market, so real estate is ultra-competitive for buyers right now.
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