Inventory is arguably the biggest challenge for buyers in today’s housing market. There are simply more buyers looking for homes to purchase than there are sellers selling them. If you have thought about selling your home, this is the perfect time. The scales are tipped in your favor.
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), total housing inventory is down 18.8% from one year ago. Inventory is well below what was available last year, and the houses that do come to the market are selling very quickly.
Sam Khater, Chief Economist at Freddie Mac notes:
“Simply put, new housing supply is not keeping up with rising demand. We estimate that the housing market is undersupplied by 3.3 million units, and the shortage is rising by about 300,000 units a year. More than half of all states have a housing shortage.”
Why is inventory so low?
There are many reasons why it’s hard to find a home to buy today, stemming from an undersupply of newly constructed homes to sellers pressing pause on their moving plans due to the current health pandemic. One of the key factors making it even more challenging, however, is the amount of time current homeowners are staying in their homes. There has truly been a fundamental shift in the market that started about 10 years ago: people are staying put longer, and it’s contributing to the shortage of houses for sale.
In the 2019 Profile of Home Buyers and Sellers, NAR explained:
“In 2019, the median tenure for sellers was 10 years…After 2008, the median tenure in the home began to increase by one year each year. By 2011, the median tenure reached nine years, where it remained for three consecutive years, and jumped up again in 2014 to 10 years.”
Staying in a home for 5-7 years used to be the norm. That is, until the housing bubble burst. Since 2010, that length of time has trended upward, toward 9-10 years, largely due to homeowners aiming to recoup their equity:Thankfully, with the strength the market has gained over the last 10 years, today’s homeowners are in a much better equity position. Now is a fantastic time for homeowners who are ready to break the 10-year trend. Especially while buyer demand is so high and inventory is so low. It’s a prime time to sell.
Thanks to historically low interest rates, sellers can enjoy a low monthly payment while getting more house for their money. Think: move-up opportunity, more square footage, or finding the features they’re really looking for rather than doing costly renovations. With more newly constructed homes on the market this year, homeowners have a golden opportunity to make the move.
Bottom Line
There are simply not enough houses for sale today. If you’re ready to leverage your equity and sell your house, reach out today. It’s a great time to move while demand for homes to buy is extremely high. Let’s sit down and talk about getting your home on the market!