If you’ve already started the house hunt and have run into some hurdles, you’re not the only one. In a tight market like this, where so few homes are listed, it’s not unusual to begin wondering if you’ll ever find the right house.
The National Association of REALTORS® (NAR) confirmed that the nationwide inventory of available houses recently fell to its all-time lowest point since NAR started measuring this metric nearly 40 years ago. Thankfully, many more listings are expected to become available in 2021.
Let’s dive into the places they may come from.
Where to find a house: 3 solid options for new inventory
This year, you’re likely to see listings pop up from:
1. Homeowners who put off selling in 2020.
Last year, many potential home sellers opted to put their moving plans on hold. This happened for a collection of reasons that included health concerns and financial worries related to the pandemic.
But now, we’re seeing a light at the end of the tunnel as vaccines roll out. This may bring comfort — and confidence — to many prospective sellers.
Danielle Hale, realtor.com’s Chief Economist, explains:
“Fortunately for would-be homebuyers, we expect sellers to return to the market as we see improvement in the economy and progress against the coronavirus.”
Numerous homeowners who chose not to sell last year are expected to list soon. Sellers may begin feeling better about allowing in-person showings, as well as about their finances and personal security.
Prequalify at LoanFly.com, and we’ll take it from there.
2. New houses are being constructed.
Not only was there a boom in land purchases during the pandemic — a trend expected to continue over the next 12 to 18 months — but home builders also had a great year in 2020.
The National Association of Home Builders (NAHB) projects that 2021 should be even better:
“For 2021, NAHB expects ongoing growth for single-family construction. It will be the first year for which total single-family construction will exceed 1 million starts since the Great Recession.”
Since more homes are being constructed in numerous markets across the U.S., homeowners who want to sell and trade up for a new house should have a wider selection of dream homes to pick from. When these homeowners sell, they’ll support the tight market by supplying more existing home (not new build) listings. This chain reaction is beneficial to today’s buyers.
3. Those financially affected by the pandemic.
There isn’t a major influx of foreclosures anticipated, due to the fact that forbearance has been offered to homeowners facing financial troubles. Still, some homeowners who’ve been impacted by the economic crisis may need to sell and relocate.
And, there are homeowners who didn’t use forbearance or were already headed toward foreclosure prior to the pandemic. Homeowners in these circumstances may choose to sell instead of entering foreclosure, a decision made possible by the record levels of equity in today’s houses.
Lawrence Yun, NAR’s Chief Economist, states:
“Given the huge price gains recently, I don’t think many homes will have to go to foreclosure… I think homes will just be sold, and there will be cash left over for the seller, even in a distressed situation. So that’s a bit of a silver lining in that we don’t expect a massive sale of distressed properties.”
It’s evident that we’re going to see a rise in the number of houses available in 2021.
With concerns about the pandemic beginning to fade, new homes under construction, and extra listings entering the market to avoid foreclosure, the outlook is bright if you plan to buy a house this year. Likewise, if you plan to sell and move up or downsize, you’re in a prime position to do so while homebuyer demand is high.
If you’re a homebuyer (or a seller who will soon be buying), don’t let today’s rising home prices deter you. Housing prices increased in 2020 as home supply shrunk and buyer demand spiked. While forecasts for 2021 vary, expected home price appreciation averages at about 5.9 percent.
NAR’s Lawrence Yun also says:
“A typical homeowner in 2020, just by being a homeowner, would have accumulated around $24,000 in housing wealth.”
Acting sooner rather than later will allow you to leverage these rising housing prices in your favor. Buy a home now, and you’ll automatically begin to see your equity grow as home prices continue to increase throughout the year.
If you haven’t found a trustworthy lender yet, this part’s easy.
Connect with a friendly loan officer near you (who knows exactly what’s going on in today’s market) and prequalify in just a few minutes.
For educational purposes only. Please contact a qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.