There is a reason why so many buyers have struggled to buy a home this year. Housing inventory was extremely limited, and several houses, have those offered for sale were also subject to great competition. Thus, buyers often received outbid houses otherwise they would have a strong buy position.
But in this respect, the situation could improve. Housing stock rose 3.9% in May compared to April, according to Zillow. This is the first monthly increase since July 2020. Moreover, stocks in May increased compared to April in 43 largest markets of the country.
At the same time, the national housing stock is still 31.2% lower than last May. And if new listings don’t come out this summer, many buyers may be forced to postpone their home ownership plans.
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It’s not easy to buy yet
Low mortgage rates sparked a surge in consumer demand, but even with a spike in listings in May, there are still not enough homes to buy to meet demand. This is forcing buyers to fight for property, land in rate wars, and drive up home prices.
Housing inventory usually peaks in the spring, and this could indeed have happened in May, albeit at a very modest level. But if stocks do not increase this summer, then, unfortunately, 2021 could be unpleasant for potential buyers on a budget.
While many people will not shy away from placing a home in the fall, selling becomes a more difficult prospect as the winter months arrive. Not only can weather interrupt scheduled open days and exhibitions, but often homes don’t look that good in winter – at least not in areas that tend to harsh conditions. After all, if one of the home’s key benefits is its park-like backyard with a pool, it’s hard to pick out that feature when the ground is covered in snow and the pool needs to be covered.
So while housing inventory may grow even more over the next few months than in May, it may not. And if so, buyers who are disappointed with today’s market may want to decide to take their time until spring 2022 and then resume their home search.
At this point, between the progress on the coronavirus and an economy that could be in better shape than it is today, we hope there will be a lot more stocks to choose from, and an increase in stocks could easily lead to lower house prices. A plus, mortgage rates are likely to remain low for some time now, so buying in 2022 won’t necessarily mean you’re stuck with a higher home loan interest rate.
It is encouraging that the number of homes for sale increased in May. But we still see a serious shortage of homes to buy. Until there are more listings, potential buyers can keep spinning the wheels.