The competition among homebuyers is intense and home prices have been soaring in recent months. The cause of this heated competition and rising prices is the short supply of homes for sale. This lack of inventory has been prevalent across the country since COVID-19.
New data from a Zillow survey shows how the pandemic may be responsible for the recent lack of homes for sale.
Approximately 25% of potential sellers cited COVID-19 health concerns as a reason they were not interested in selling their home right now. Another reason seller may be holding off is because more Americans have been able to take advantage of COVID-era mortgage forbearance programs. About 6% of survey respondents said that these forbearance programs were the reason they were putting off selling their homes.
A little more than one-third of the survey respondents (34%) said that life uncertainty was a key reason they wouldn’t sell right now but perhaps in the next three years. Similarly, 31% of respondents said that financial uncertainty was the reason they wouldn’t sell during this time. The pandemic has caused life uncertainty and financial uncertainty across the country, which are clearly factors that are keeping sellers out of the market.
The recent rise in sales prices which have also occurred in the wake of the pandemic is another reason sellers are holding off. Median home prices are at record-breaking highs, “up nearly 11% year-over-year for the week ending September 5th.” Nearly 40% of respondents considering selling their homes in the next three years claimed that they were waiting to sell at a later date in the hopes of getting an even higher price.
Since home prices have skyrocketed during the pandemic, many potential sellers are concerned about whether or not they will be able to afford or even find a new home if they were to sell right now. Among survey respondents who were considering selling their homes in the next three years, 31% said that they were pressing pause on their plans because they were worried about finding or affording a new home.
The housing supply crisis has turned the market upside down as inventory is now down 37% year-over-year from 2019. There is no telling how long COVID-19’s impact on sellers–and the housing market overall–will last.
—By Cristin Espinosa