There’s a reason many prospective buyers have struggled to purchase a home in 2021. Low mortgage rates have led to a surge in buyer demand, but there hasn’t been enough inventory to meet that demand. As such, home prices have soared on a national level, and even buyers with larger budgets are having difficulties finding a suitable place to make an offer on.
So why are there so few homes available on the market? Realtor.com conducted a survey, and here’s what it dug up.
Sellers can’t find replacement homes
For many potential sellers, the decision not to list a home in 2021 boiled down to not being able to find a new home in their price range. For those who are looking to sell and then rent for a while or downsize, now’s the optimal time to put a home on the market. But those looking to sell and buy a comparable or larger home are apt to face the same struggles as buyers without a property to sell.
Sellers are worried about the economy
The U.S. economy is in far better shape these days than it was back when the pandemic first hit U.S. soil. The jobless rate has steadily declined, and there are plenty of employment opportunities available. But in spite of those improvements, many sellers still say the current economic climate makes them hesitant to make a big life change, like selling a home and moving to a new one.
Sellers aren’t sure where to move
A lot of people are still working remotely in the wake of the pandemic and aren’t sure whether they’ll get to do so on a permanent basis or not. As such, many workers’ moving plans are in flux. So it’s not surprising that another big reason people aren’t selling homes is that they’re just not sure where they want to move to.
Sellers worry about buying and selling simultaneously
Sometimes, people who sell and buy a home at the same time find that everything runs smoothly. In some cases, they’re able to arrange it so they can close on both properties in a single day and move without stress. But things don’t always work out like that. And today’s sellers don’t want to take the risk that they might get an offer but struggle to find a new place to move to in time, or that they’ll find a replacement home but that closing will be delayed.
When will more homes hit the market?
Some of the above issues may resolve in time. For example, if the economy continues to steadily improve, sellers may grow more comfortable with the idea of putting their homes on the market. And once more employers firm up their longer-term work plans, sellers may have a better sense of what their relocation options entail.
But when it comes to home affordability, we have a bit of a catch-22 going on. Today’s sellers don’t want to list their homes because they worry about affording a new one. But home prices aren’t going to come down until more inventory is added to the real estate market.
There’s a good chance housing inventory will pick up at some point in 2022, though most likely not until the second quarter of the year at the earliest. Today’s would-be buyers may need to continue being patient on the road to finding the right place to call home.
