The primary reason there was low housing inventory in 2021 was because of seller uncertainty. To understand why housing inventory is so low, we have to look at how the 2021 market behaved. Why is the Housing Inventory so Low in 2022? As a buyer, you will have to stay prepared and be ready to move quickly once you find a home that meets your criteria since there’s a high probability that someone else is interested in the home as well. Low inventory will inevitably translate into more competition for available properties. Normally, there’s approximately a six-month supply of inventory homes for sale at any time. That means that if no new homes become available, there won’t be any homes available to buy after a month. If we look at 2022 data so far, there is about a one-month supply of inventory homes on the market right now. Statistics show a nearly 13% increase in home prices in 2021. The combination of low inventory real estate and high demand lead to the increase in house prices. What made the situation worse was the higher number of buyers in the market. How Low is the Inventory Level is Right Now?Ģ021 was the lowest housing inventory year on record housing inventory declined almost 40%. But if there are more homes available in inventory, buyers are more likely to want to make a move. In a low inventory real estate market, buyers may become discouraged when they find limited options, most of which don’t even meet their needs or are unavailable in their preferred neighborhoods. Housing inventory is calculated by simply counting the properties currently listed on the real estate market as of the last day of the month.

This listing would not include houses that are already on a contingency or are temporarily not available for showing. A buyer can visit a property or attend an open house event and provide a list of the inventory homes for sale. Whenever a seller lists a property for sale, it is counted towards the area’s total housing inventory. What is an Inventory Home?Īn inventory home, otherwise known as a home for sale or active listing, is simply the number of properties available in the market for sale.

Before we discuss why the housing inventory is so low, let’s first define what is an inventory home.

New home inventory