Here are five reasons why inventory is so very low right now.
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Are you wondering when the shortage of home supply will come to an end? Today I’ll share the five reasons that inventory is so low these days:
1. Interest rates are historically low. Many who were on the fence about buying are now trying to secure a good home and lock in a low interest rate.
2. Some homeowners are renting instead of selling. People who bought homes a year ago but now need to move up due to a change in their family size or their employment are now keeping those homes as a rental properties. They got a good interest rate so now they can afford to rent those properties and still make money on the home.
3. There are fewer new construction homes. For a decade now, new home construction volume has been on the decline compared to the 30-year average; recently, it even got as low as 500,000 units, where the average was once 1.5 million units.
4. A changing demographic. Millennials are beginning to hit the market. In their early to mid-30s, they’re now a prime buying time in their lives, and they’re flooding the market and scooping up available homes.
5. Government policy. The government supports homeownership using things like tax breaks, incentivizing people to buy as opposed to rent.
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