Investors Purchasing Inventory
Average homeowners aren’t the only ones buying homes. Real estate investors also buy up available housing inventory, whether that be a fixer-upper, a rental property, a second home or an investment property. Since real estate investors often have more financial buying power than a traditional home buyer, they can often afford more properties. This can increase competition for home buyers by further reducing the number of homes on the market.
Fewer New Construction Homes
Another major factor contributing to low inventory is a lack of new builds. New construction plays a vital role in the number of homes that are sold in a year. When builders struggle with unstable building supply costs and a lack of skilled tradespeople to build new homes, there'll be a decline in new construction homes hitting the market.
This hurts the market, and the limited housing options make it harder for buyers specifically looking for a new construction home to purchase.
Some Sellers Aren’t Listing
Savvy sellers know that the lack of available inventory will affect them once they start looking for a new home to buy after selling their own. Because of this, many homeowners who were planning on selling their homes will often hold off until the market stabilizes. Since sellers won’t put their home up for sale, the market will end up with a low amount of inventory.
