Where Is All The Housing Inventory?


In recent years, the housing market has been facing a significant shortage of available inventory, causing frustration among homebuyers and real estate professionals alike. This shortage has led to increased competition, rising prices, and a challenging environment for those looking to purchase a home. In this blog post, we will explore the sources of housing inventory and discuss why it has become increasingly scarce in recent times.

  1. New Construction: One of the primary sources of housing inventory is new construction. However, builders have been facing challenges in meeting the demand for new homes. Since the 2008 financial crisis, there has been a noticeable decline in new construction, resulting in a prolonged period of underbuilding. Many builders were hesitant to invest in new projects due to economic uncertainty and tightened lending standards. Consequently, this shortage of new homes has contributed significantly to the overall housing inventory crisis.

  2. Resale: Another source of housing inventory is the resale market, where existing homeowners choose to sell their properties. However, even this segment has been affected by the shortage. Many current homeowners have been reluctant to part with their homes due to various factors. One significant reason is that homeowners who purchased their properties before the financial crisis secured low-interest, long-term financing. As a result, they enjoy exceptionally affordable mortgage payments, which incentivizes them to hold onto their homes rather than sell. This lack of resale inventory has further exacerbated the housing shortage.

  3. Foreclosures: Foreclosed properties, resulting from homeowners' inability to meet mortgage obligations, traditionally contribute to housing inventory. However, foreclosures have been at 16-year lows in recent times. There are a couple of key factors behind this decline. Firstly, the rise in home values and increasing equity has provided homeowners with the opportunity to sell their properties conventionally, without resorting to foreclosure. Secondly, lending standards have undergone significant reforms since the 2008 crisis, making it harder for homeowners to default on their mortgages. These factors have collectively reduced the number of foreclosed properties available in the market.

Conclusion: The housing inventory shortage is a complex issue with multiple contributing factors. The underbuilding of new homes since the 2008 financial crisis, reluctance among current homeowners to sell their properties due to favorable financing terms, and a decline in foreclosures due to rising equity and improved lending standards have all played a role in creating this challenging situation. Addressing this shortage will require a multi-faceted approach, including increased investment in new construction, incentives for homeowners to sell, and continued reforms in lending practices. Only through a combination of these efforts can we hope to alleviate the housing inventory crisis and create a more balanced and accessible housing market for all.


This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Post a Comment