The Impact of Tight Inventory on the Housing Market
- By simplify
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- 09 Jan, 2018
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Here are the thoughts of a few industry experts on the subject:
National Association of Realtors
“Total housing inventory at the end of November dropped 7.2 percent to 1.67 million existing homes available for sale, and is now 9.7 percent lower than a year ago (1.85 million) and has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace , which is down from 4.0 months a year ago.”
Joseph Kirchner, Senior Economist for Realtor.com
“The increases in single-family permits and starts show that builders are planning and starting new construction projects, that’s a good thing because it will help to relieve the shortage of homes on the market .”
Sam Khater, Deputy Chief Economist at CoreLogic
“ Inventory is tighter than it appears . It’s much lower for entry-level buyers.”
Bottom Line

There is no doubt that the largest challenge in today’s housing market is a lack of housing inventory for sale. This challenge has been defined as an “overwhelming lack of supply,” and even a “straight up inventory crisis.”
First American just released the results of a survey which sheds light on the reasons for the current lack of supply.
The survey asked title agents and real estate professionals to identify what they believe are the top reasons for this lack of inventory in their markets. Here are the results of the survey:
- 47% - existing homeowners are worried that they will not be able to find a home to buy
- 5% - first-time buyer demand is absorbing a large share of available homes
- 3% - existing homeowners’ mortgage rates are lower than the current rates
- 6% - insufficient or negative equity in the home
- 6% - foreign buyer demand is absorbing a large share of available homes
As the survey revealed, there is a shortage of current homeowners willing to put their homes on the market for one of three reasons (see numbers 1, 3 and 4 above).
Is this an opportunity for some homeowners?
The report on the survey explains:
“The crowd has spoken, and it seems in many markets home buyers and sellers alike are ‘imprisoned’ by the lack of housing inventory."
That leaves a tremendous opportunity for every homeowner not facing these concerns. If you can put your home on the market today, you are subject to far less competition than at any time in recent history. That will result in your home selling quickly and for the highest possible price.
Bottom Line
While many homeowners are feeling imprisoned for multiple reasons, those who are not handcuffed by these concerns have a once in a lifetime opportunity to sell their houses at a peak selling time.







