Housing Research Brief
Lack of Supply and Rising Costs Impede Path to Homeownership
Supply of homes on market tightens. The number of existing houses listed for sale retreated 32.6 percent year over year in February, the largest annual drop ever recorded, pushing inventory to an all-time low. The few listings that come to market are snatched up quickly, cutting the average days on the market to a new low of 20 days. The availability of residences affordable to most renters, those under $250,000, is particularly challenging, keeping many in rentals longer. Economic uncertainty due to the pandemic has reduced the number of homes being listed for sale as more households are delaying decisions to upsize or downsize and fewer people are relocating for employment. In addition, more homeowners have refinanced during the low interest rate climate and are hesitant to move. The lack of supply contributed to the monthly sales of both existing and new homes falling 6.6 percent and 18.2 percent, respectively, and pushing prices to a new high.