The housing market is now positioned for an even stronger year as it has incredibly recovered in 2020. Record-low mortgage interest rates are a driving factor in this continued momentum, with average rates hovering at historic all-time lows.
Based on the recent Realtors Confidence Index Survey from the National Association of Realtors (NAR), buyer demand across the country is incredibly strong. However, this is not the same case on the supply side. Seller traffic is simply not keeping up. Here’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 just reported that the actual number of homes currently for sale stands at 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 – significantly higher than it is today.
What does this mean for buyers and sellers?
Buyers need to remain patient in the search process. At the same time, they must be ready to act immediately once they find the right home since bidding wars are more common when so few houses are available for sale.
Sellers may not want to wait until spring to put their houses on the market, though. With such high buyer demand and such a low supply, now is the perfect time to sell a house on optimal terms.