Tight inventory is one of the biggest factors impacting the housing market, agree experts. In fact, the CREA says that inventory is tighter now than it's been in decades.1
After dropping to a 20-year low, new supply picked up somewhat this spring, climbing on a month-over-month basis by 5.8% in March and by another 1.6% in April.1 But it's still well below what's typical this time of year, making it tough for buyers to find a suitable home.
One big reason for the trickle in existing homes for sale: reluctant sellers.10 Some would-be sellers with more restrictive mortgages are holding back from listing their homes because they are reluctant to give up their lower mortgage rates.11 Others are waiting for prices to significantly increase. But since fear is a driving factor for many real estate holdouts, this year's warming market could offer some helpful reassurance.
Reluctant sellers aren't the only reason, though, for why inventory is so limited. Sluggish home building is also a major factor impacting supply. For example, new home inventories are at historic lows, deepening the housing crunch.12
Housing starts have also been weak for much of this past year. But a springtime burst in activity led to a 22% jump in April, according to the CMHC, renewing hopes that builders may still be able to overcome this year's higher rates.13 As BMO's Douglas Porter noted, “New home building is also showing some signs of surprising resiliency.”2
What does it mean for you? Inventory is tight, but less frenzied competition compared to last year means more choice and negotiating power for buyers. If you’ve had trouble finding a home in the past, it may be time to take another look. We can help you explore both new and existing homes in our area.
Sellers are enjoying reduced competition right now, as well. However, the longer you wait to list, the more competition you’re likely to face. And if you feel locked in by your current, lower mortgage rate, consider this: If you roll your equity gains into a down payment on your next home, you could possibly lower your monthly payment. Reach out to discuss your options.