The housing market made an incredible recovery in 2020 and is now positioned for an even stronger year in 2021. Record-low mortgage interest ratesÂ are a driving factor in this continued momentum, with average rates hovering at historic all-time lows.
According to the latestÂ Realtors Confidence Index SurveyÂ from theÂ National Association of RealtorsÂ (NAR),Â buyer demand across the country is incredibly strong. Thatâ€™s not the case, however, on the supply side. Seller traffic is simply not keeping up. Hereâ€™s a breakdown by state:As the maps show, buyer traffic is high, but seller traffic is low. With so few homes for sale right now, record-low inventory is creating a mismatch between supply and demand.
NAR also justÂ reportedÂ that the actual number of homes currently for sale stands atÂ 1.28 million, down 22% from one year ago (1.64 million). Additionally, inventory is at an all-time low with 2.3 months supply available at the current sales pace. In a normal market, that number would be 6.0 months of inventory â€“ significantly higher than it is today.
BuyersÂ need toÂ remain patientÂ in the search process. At the same time, they must be ready toÂ act immediately once they find the right home since bidding wars are more common when so few houses are available for sale.
SellersÂ may not want to wait until spring to put their houses on the market, though. WithÂ such high buyer demand and such a low supply, now is the perfect time to sell a house on optimal terms.
The real estate market is entering the year like a lion. Thereâ€™s no indication it will lose that roar, assuming inventory continues to come to market.