Even though more homes are available for sale than last year, there are still more buyers than houses. So, know that your home can stand out if you’ve got moving on your mind.
There are several key reasons why there aren’t enough homes to go around, and understanding them will help you see why the market is working in your favor if you’re ready to make a move.
What’s Causing the Shortage?
1. Underproduction of Homes: The industry hasn’t built enough homes for years to keep up with demand. As Zillow explains:
“In 2022, 1.4 million homes were built — at the time, the best year for home construction since the early stages of the Great Recession. However, the number of U.S. families increased by 1.8 million that year, meaning the country did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade.”
2. Rising Costs: The pandemic has caused building materials, labor shortages, and supply chain disruptions that have made it harder and more expensive to build homes. This can either limit or stop new home construction in some areas.
3. Regional Imbalances: Some markets are more affected by the housing shortage than others. Popular and more desirable areas have more people moving in faster than new homes can be built. The number of new building permits issued doesn’t always keep pace with job growth in these regions, leading to even tighter markets and higher prices.
How Big Is the Problem?
According to estimates from Real Estate News, the U.S. is facing a housing shortfall of roughly 3.3 million homes, based on an average of several expert insights (see graph below):
This shows that a significant number of homes need to be built just to meet current buyer demand. But what about future demand?
According to John Burns Research and Consulting (JBREC), over the next 10 years, the U.S. will need about 18 million new homes to meet projected demand, including homes for new households, second homes, and replacements for aging or unusable homes.
So, even though more homes are on the market than last year, there still aren’t enough. You can win this if you’re ready to sell your house.
What You Need To Remember
If you’re considering selling, the shortage of homes for sale means your house will likely get serious attention from buyers. It’ll take years to climb out of this inventory deficit, and the market is still very tight. So, when buyers compete for relatively few homes like they are right now, that creates more interest in the houses on the market, putting upward pressure on prices and ultimately working in your favor.
And since every market is different, working with a real estate agent who understands local trends is essential. They can help you price your house right and create a strategy to attract the right buyers.
Bottom Line
While more homes are for sale than last year, there’s still a shortage. And this puts you in the driver’s seat as a seller. Let’s connect so you have someone to help you take advantage of today’s market.
