There's no denying that the housing market has presented a number of challenges to homebuyers over the last two years. The limited number of available homes for sale, as well as the intensity and frequency of bidding wars, were two of the most significant obstacles for homebuyers during the pandemic. However, those two factors have reached a turning point.

As you may have heard, the number of homes for sale has increased this year, and especially this spring. As realtor.com's Chief Economist Danielle Hale explains:

“New listings–a measure of sellers putting homes up for sale–were up 6% above one year ago. Home sellers in many markets across the country continue to benefit from rising home prices and fast-selling homes. That’s prompted a growing number of homeowners to sell homes this year compared to last, giving home shoppers much needed options.”

This is encouraging news. With more homes on the market, you have a better chance of finding one that meets all of your criteria.

Buyer Competition Moderating Helps Inventory Grow Even More

According to Mark Fleming, Chief Economist at First American, inventory growth is occurring not only as a result of an increase in the number of listings coming onto the market, but also as buyer demand has moderated slightly as a result of higher mortgage rates and other economic factors:

“There has been a pickup in the inventory that we’ve seen recently, but it’s not from a big increase in new listings . . . but rather a slowdown in the pace of sales. And remember that months’ supply measures the inventory of sale relative to the pace of sales. Same inventory, fewer sales, means more months’ supply.”

Essentially, the market is shifting away from the frenzy of buyer competition seen during the pandemic, which is assisting in the growth of available inventory. In their most recent forecast, realtor.com cites demand moderation as a key factor and predicts that inventory growth will continue:

“As rising inflation and mortgage rates bring U.S. housing demand back from the 2021 frenzy, . . . inventory will grow double-digits over 2021 and offer buyers a better-than-expected chance to find a home.”

How This Impacts You

With more homes on the market and a slower pace of home sales, you'll have more options to choose from when looking for your next home. That's fantastic news if you've been looking for a long time with little to no success. Remember, there isn't a sudden vast amount of inventory; there are simply more homes to choose from than even a few months ago. So, when you find the right home for you, you'll still want to be decisive and move quickly.

And if you do, you may face less competition from other buyers. If you've been putting off entering the market because the intensity of the bidding wars has intimidated you, or if you've been outbid on several homes, this moderation may help make the homebuying process go more smoothly. It won't be easy, and bidding wars won't be a thing of the past - far from it. But it won't feel quite so impossible.

Bottom Line

As the housing market begins to return to pre-pandemic levels, you may have a once-in-a-lifetime opportunity. With lower levels of buyer competition and more homes actively for sale, your home search may have become less difficult. Let's get together today to start the process.