The days of few homes on the market and multiple offers are predicted to return—and for buyers, the potential for renewed roadblocks, according to a new realtor.com® report.
The change is on course to hit in October, realtor.com’s researchers say. In February of this year, gains in inventory shrunk substantially, down from 6.4 percent in January to 5.8 percent. In the following two months, gains hovered at 4.4 percent. Come May, growth slackened to 2.9 percent, and in June, to 2.8 percent. According to realtor.com, if conditions hold, there is the potential for a resurging shortage in supply—and in as little as three months.
“It was only 18 months ago that the number of homes for sale hit its lowest level in recorded history and sparked the fiercest competition among buyers we’ve ever seen,” Danielle Hale, chief economist at realtor.com, says. “If the trend we’re seeing continues, overall inventory could near record lows by early next year.”
According to Hale, the cause of the decline is hard to pinpoint—but a big factor is homeowners’ reluctance to sell.
“It’s likely a combination of rate-lock, recently decreased consumer confidence and older generations choosing to age in place,” says Hale. “So far there’s been a lackluster response to low mortgage rates, but if they do spark fresh buyer interest later in the year, U.S. inventory could set new record lows.”
If bore out, buyers could face more obstacles, as listings move quickly and prices surge. In June, the average days on market rose to 56, according to realtor.com’s report, two days longer year-over-year. Over the same time, an additional 8.7 percent of listings lowered their price. Of June’s listings nationwide, the median price was $316,000—likely the peak for the year.
For more information, please visit www.realtor.com.
Suzanne De Vita is RISMedia’s online editor. RISMedia is the residential real estate industry’s definitive source for news and information. Email Suzanne your real estate news ideas at sdevita@rismedia.com.
