Throughout metropolitan areas nationwide, the tight supply of for-sale homes – already constrained pre-coronavirus – is continuing.
Although the increase in purchase mortgage applications signals a rebound of home-buyer interest and record-low mortgage rates could spur that further, “steeper declines in inventory could be on the horizon if more sellers don’t list homes to meet rising demand,” Realtor.com said in its weekly inventory report released Thursday.
For the week ending last Saturday, May 23, total inventory for sale dropped 22% year-over-year, the Realtor.com report said. That’s a larger drop than prior weeks.
NAR’s most recent numbers echo similar supply constraints. The number of homes for sale at the end of April totaled 1.47 million, the National Association of Realtors said last week. That’s the lowest level ever recorded for April, said Lawrence Yun, NAR’s chief economist, on a call with reporters.
“A colleague of mine estimated that we were about 3.8 million homes short to start the year in 2020, and that was before COVID,” Realtor.com’s Chief Economist Danielle Hale said, noting there’s been about a decade of under-building throughout the U.S. following the last housing boom and bust.
“This is not a new situation, but it has been exacerbated by the COVID situation, because sellers have decided to stay out of the market and also we’ve seen construction slow,” Hale said.