Thereâ€™s no denying the housing market has delivered a fair share of challenges to homebuyers over the past two years. Two of the biggest hurdles homebuyers faced during the pandemic were the limited number of homes for sale and the intensity and frequency of bidding wars. But those two things have reached a turning point.
â€œNew listingsâ€“a measure of sellers putting homes up for saleâ€“were up 6% above one year ago. Home sellers in many markets across the country continue to benefit from rising home prices and fast-selling homes. Thatâ€™s prompted a growing number of homeowners to sell homes this year compared to last, giving home shoppers much needed options.â€
This is encouraging news. More homes coming onto the market give you a greater chance of finding one that checks all your boxes.
Mark Fleming, Chief Economist at First American, says inventory growth is happening not just because thereâ€™s an increase in the number of listings coming onto the market, but also because buyer demand has moderated some in light of higher mortgage rates and other economic factors:
â€œThere has been a pickup in the inventory that weâ€™ve seen recently, but itâ€™s not from a big increase in new listings . . . but rather a slowdown in the pace of sales. And remember that monthsâ€™ supply measures the inventory of sale relative to the pace of sales. Same inventory, fewer sales, means more monthsâ€™ supply.â€
Basically, the market is shifting away from the frenzy of buyer competition seen during the pandemic, and thatâ€™s helping available inventory grow. In their latest forecast, realtor.com also mentions the moderation of demand as a key factor and projects the inventory growth should continue:
â€œAs rising inflation and mortgage rates bring U.S. housing demand back from the 2021 frenzy, . . . inventory will grow double-digits over 2021 and offer buyers a better-than-expected chance to find a home.â€
The combination of more homes coming onto the market and a slower pace of home sales means youâ€™ll have more options to choose from as you search for your next home. Thatâ€™s great news if youâ€™ve been searching for a while with little to no luck. Just remember, there isnâ€™t a sudden surplus of inventory, just more homes to choose from than even a few months ago. So, youâ€™ll still want to be decisive and move fast when you find the right home for you.
And when you do, you may be faced with less competition from other buyers too. If youâ€™ve been waiting to jump into the market because the intensity of the bidding wars was intimidating or if youâ€™ve been outbid on several homes, this moderation could help make the homebuying process a bit smoother. Itâ€™s not that itâ€™ll be easy or that bidding wars are a thing of the past â€“ thatâ€™s not the case. But it wonâ€™t feel nearly as impossible.
As the housing market begins its shift back toward pre-pandemic levels, you could have a unique opportunity in front of you. With moderating levels of buyer competition and more homes actively for sale, your home search may have gotten a bit less challenging. Letâ€™s connect to begin the process today.