Anyone who works in real estate or who is actively trying to buy a house right now will tell you: this is a wild seller’s market. The data used to track home prices nation-wide is called the Case-Shiller Index and it recently released it’s January findings. Home prices are up 11% since January 2020. That’s a 15 year high. Makes buying a home difficult, but doesn’t explain the all-out melee home buyers are experiencing: that would be thanks to the supply of homes, which the National Association of Realtors tracks. They report a 25.7% drop in houses for sale during that same January 2020-2021 timeframe. By their records, inventory is the lowest since 1982. They also note that inventory has been falling for 20 straight months.
It’s easy to start comparing the jack-up in home prices to the housing bubble that popped in 2008, but I would argue there are some important distinctions happening with this market: the first is that mortgage interest rates are stupid low (seriously, historically low). When money is cheap, families can afford to borrow more of it. When they can afford more, they use that power to get what they want. Another issue is directly tied to that 2008 housing bubble: because home builders got burned with inventory then, they have been under-building since.
By a couple million homes per year.
Which means housing supply is just not there. Throw in the low interest rates and a the families who have been stuck in their residences for the past year and have decided its time to get out of that apartment or size-up to a bigger home and you’ve got a mad rush to buy we’ve been seeing. All this to say, if you’re looking to buy a new home, good luck and Godspeed.