Even though there are more homes available for sale than there were at this time last year, there are still more buyers than there are houses to choose from. If you’ve got moving on your mind, your house can really stand out.
There are several key reasons why there aren’t enough homes to go around. Understanding the reasons will help you see why the market is working in your favor.
What’s Causing the Shortage?
- Underproduction of Homes: For years, the industry hasn’t built enough homes 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. That means 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 husing affordability for more than a decade.”
2. Rising Costs: Building materials, labor shortages, and supply chain disruptions caused by the pandemic have all 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 shortage of homes 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. That leads 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)
This shows there is a significant number of homes that need to be built just to meet current demand from buyers. But what about future demand?
According to John Burns Research and Consulting, over the next 10 years, the U.S. will need about 18 million new homes to meet projected demand. This includes homes for new households, second homes, and replacements for aging or unusable homes.
Even though more homes are on the market compared to last year, there still aren’t enough of them to go around. This is where you can really win if you are ready to sell your house.
What You Need To Remember
If you’re thinking about selling, the shortage of homes for sale means your house is likely to get some serious buyers. It’ll take years to climb out of this inventory deficit. The market is very tight. When buyers are competing for fewer homes like now, that creates more interest in houses on the market. This puts pressure on prices and ultimately working in your favor.
Every market is different. It’s important to work with a real estate agent. I understand local trends and I can price your house right to sell.