But real estate agents know exactly where to look and what to do to make your dream a reality. Connect with an agent so you have an expert on your side to help you successfully navigate the market and find your next home.
One question that’s top of mind if you’re thinking about making a move today is: Why is it so hard to find a house to buy? And while it may be tempting to wait it out until you have more options, that’s probably not the best strategy. Here’s why.
There aren’t enough homes available for sale, but that shortage isn’t just a today problem. It’s been a challenge for years. Let’s take a look at some of the long-term and short-term factors that have contributed to this limited supply.
Underbuilding Is a Long-Standing Problem
One of the big reasons inventory is low is because builders haven’t been building enough homes in recent years. The graph below shows new construction for single-family homes over the past five decades, including the long-term average for housing units completed:
For 14 straight years, builders didn’t construct enough homes to meet the historical average (shown in red). That underbuilding created a significant inventory deficit. And while new home construction is back on track and meeting the historical average right now, the long-term inventory problem isn’t going to be solved overnight.
Today’s Mortgage Rates Create a Lock-In Effect
There are also a few factors at play in today’s market adding to the inventory challenge. The first is the mortgage rate lock-in effect. Basically, some homeowners are reluctant to sell because of where mortgage rates are right now. They don’t want to move and take on a rate that’s higher than the one they have on their current home. The chart below helps illustrate just how many homeowners may find themselves in this situation:
Those homeowners need to remember their needs may matter just as much as the financial aspects of their move.
Misinformation in the Media Is Creating Unnecessary Fear
Another thing that’s limiting inventory right now is the fear that’s been created by the media. You’ve likely seen the negative headlines calling for a housing crash, or the ones saying home prices would fall by 20%. While neither of those things happened, the stories may have dinged your confidence enough for you to think it’s better to hold off and wait for things to calm down. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
That’s further limiting inventory because people who would make a move otherwise now feel hesitant to do so. But the market isn’t doom and gloom, even if the headlines are. An agent can help you separate fact from fiction.
How This Impacts You
If you’re wondering how today’s low inventory affects you, it depends on if you’re selling or buying a home, or both.
For buyers: A limited number of homes for sale means you’ll want to seriously consider all of your options, including various areas and housing types. A skilled professional will help you explore all of what’s available and find the home that best fits your needs. They can even coach you through casting a broader net if you need to expand your search.
For sellers: Today’s low inventory actually offers incredible benefits because your house will stand out. A real estate agent can walk you through why it’s especially worthwhile to sell with these conditions. And since many sellers are also buyers, that agent is also an essential resource to help you stay up to date on the latest homes available for sale in your area so you can find your next dream home.
The low supply of homes for sale isn’t a new challenge. There are a number of long-term and short-term factors leading to the current inventory deficit. If you’re looking to make a move, connect with a real estate agent. That way you’ll have an expert on your side to explain how this impacts you and what’s happening with housing inventory in your area.
If you’re in the process of looking for a home today, you know the supply of homes for sale is low because you’re feeling the impact of having a limited pool of options. And, if your biggest hurdle right now is that you’re having trouble finding something you like, don’t forget that a newly built home is a great option.
As a recent article from the National Association of Realtors (NAR) says:
“Home buyers continue to be met with limited housing options during what’s typically the real estate market’s busiest season. . . . The current supply of existing homes is about half the level it was in 2019 . . . Meanwhile, the market for new construction is a bright spot.”
Here’s a look at a key metric that shows just how much new home construction is ramping up nationwide. It’s called new residential completions. Basically, completions are newly built homes that are finished and ready to move into.
The graph below uses data from the Census to show the trend of new-home completions over time, including the long-term average for the number of finished housing units (shown in black on the graph):
As you can see on the left (shown in orange), leading up to the housing crash, builders exceeded that average. The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008.
Since then, the level of new home construction has fallen off, and builders haven’t built enough homes to meet the historical average (shown in red). That underbuilding left the housing market with a multi-year inventory deficit. And, that deficit is part of what makes inventory so low right now.
But, here’s the good news. The green on the right shows that according to the latest report from the Census, builders are matching the long-term average right now. And that means they’re bringing more newly built homes to the market than they have in recent memory.
And residential starts and permits are also gaining momentum. Starts are homes where the construction has officially kicked off. Permits are homes where builders are planning to break ground soon. Since both are up, it’s a sign there are even more newly built homes coming soon.
What This Means for You
More newly built homes in various stages of the construction process means your pool of options just got bigger. If you’re looking to move right now and timing is important to you, reach out to a local real estate professional to explore the homes that were recently completed in your area. If construction is done on those homes, you should be able to move in quickly.
But, if you can wait a bit and the idea of customizing a home from the ground up appeals to you, ask that same agent about the homes in your area that are in the process of being built. If you buy a home that’s still in the works, you can help pick the features and finishings along the way. And when none of the homes you’ve looked at so far are to your liking, being able to tailor one to your taste may be your best option.
Either way, a trusted real estate agent is a crucial part of the process. They’ll know exactly what’s available in your area and can base their recommendations on your unique needs, desired neighborhoods, and more.
So, if you’re having trouble finding a home you like while inventory is so low, it may be time to consider looking into new-home construction. If you’d like to start that conversation, reach out to a trusted local real estate professional who’s an expert on what’s available in your area.
Do you want to sell your house, but hesitate because you’re worried you won’t be able to find your next home in today’s market? You’re not alone, but there’s some good news that may ease your worries. New home construction is up and is becoming an increasingly significant part of the housing inventory.
That means when you go to put your house on the market this summer, considering newly built homes is crucial for expanding the options you’ll have for your next move.
Near-Record Percentage of New Home Inventory
Newly built homes today make up a near-record percentage of the total number of homes available for sale (see graph below):
In fact, as the data shows, newly built homes now make up 31% of the total for-sale inventory. Over the past couple of decades, newly built homes made up an average of only around 13% of total housing inventory from 1983 to 2019.
That means the percentage of the total available homes that are newly built is over two times higher than the norm.
Why This Matters to You
Overall, the supply of homes for sale is still low. And when there’s limited supply, it’s crucial to explore all of your available choices. New-home construction has emerged as a game changer with increasing inventory. Not to mention, recent data shows it’s gaining even more momentum as more newly built homes are underway and will be coming to the market in the months ahead.
Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), highlights the importance of newly built homes for those looking to buy in today’s housing market. Dietz states:
“With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.”
Don’t overlook this growing market segment and risk missing out on great opportunities to find your ideal home. Since new home construction accounts for roughly 31% of total for sale inventory, you could be cutting nearly one in three options from your search if you don’t consider newly built homes.
If you’re looking to make a move, a local real estate agent can help you sell your current house and explore newly built options in your area. They have the expertise you need to handle both sides of the process so you can move out of your current house and into your brand-new dream home.
Now’s the time to sell your house and take advantage of the momentum that’s building in new home construction. Reach out to a trusted real estate agent who can guide you throughout the selling and buying process so you can make your transition to a newly built home a reality.
If you’re looking to buy a house, you may find today’s limited supply of homes available for sale challenging. When housing inventory is as low as it is right now, it can feel like a bit of an uphill battle to find the perfect home for you because there just isn’t that much to choose from. If you need to open up your pool of options, it may be time to consider a newly built home.
According to the latest data from the U.S. Census, there’s positive news when it comes to new home construction. When you look at the first three months of this year, you’ll find:
More new homes were completed and are ready to sell. Thisgives you more move-in-ready options for your search.
Builders broke ground and started construction on more single-family homes. This means there are more homes intended for one household in the beginning stages of construction, allowing you the opportunity to customize one to your liking.
The number of permits for building new single-family homes ticked up. This shows builders are ramping up to start on even more home construction soon.
And, while this is all good news for broadening your options for your home search, there are other perks that come with considering a newly built home.
When you buy a new home under construction, you can tailor it to your unique needs and taste. Bankratesays:
“Building means customizing. . . . instead of wishing your home had a certain kind of flooring, a sunroom or some other special amenity, you’ll be able to tailor the property to your exact needs.”
Brand New Everything
Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.
And, because everything is new, you’ll likely find there are fewer maintenance and repair needs up front. As Realtor.com explains:
“. . . if something does go wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties . . .”
Lastly, building a home gives you the opportunity to incorporate more energy-efficient options that can help lower your costs over time – which can feel especially important when inflation’s raising many of the costs around you.
If you’re having trouble finding your dream home in today’s market, it may be time to consider newly built homes as an option. Partner with a real estate professional to learn more about what’s available in your local area.
If you’re thinking about buying a home, you might be focusing on previously owned ones. But with so few houses for sale today, it makes sense to consider all your options, and that includes a home that’s newly built. (more…)