Finally, Good News for First-Time Homebuyers

Consider it a catch-2021: Because there are so few homes on the market, many people who want to sell their houses aren’t listing them right now. After all, what good is it to sell your home if you can’t find one to move into? And for renters hoping to become first-time homebuyers, the situation can feel borderline hopeless—abodes under $329,100 (the median price of a house across the U.S.) tend to be hardest to come by. Thankfully, though, a recent Realtor.com study offers a ray of hope: We’re likely to see an influx in houses hitting the market, reducing competition (and, fingers crossed, bidding wars) across the board.

A survey of 3,998 adults revealed that 10 percent of homeowners plan on selling their houses over the next 12 months, a whopping 25 percent higher than the number of homes listed in a typical (read: non-pandemic) year. Oh, and roughly 60 percent of those surveyed plan on listing their home for $350,000 or less, meaning there will be more opportunities that can appeal to first-time homebuyers specifically. Add to that the fact that this past March, construction on new single-family homes rose to the highest it’s been since 2006, and it seems like we’re finally headed toward sweet relief for buyers everywhere.

So, how soon will the market start to open up? That’s a little challenging to predict, but it seems like we’ll start to see a rise in listings within the next six months. Realtor.com found that of those who plan on selling their homes, a full 76 percent have already started the steps to list their spaces. It’s a sign that those caught in the I-want-to-buy-a-house-but-where-will-I-live limbo are starting to feel more comfortable making the leap. Which may be due to widespread vaccinations and things opening up, as well as clarity from companies about their remote work policies and opportunities that we didn’t have before. (Being unsure of where to move and concerns about selling a home amid a pandemic were two of the top reasons people cited for not listing their houses.)

Still, that doesn’t mean home prices are going to dramatically drop and that the bidding wars will end. “Despite this good news, we were in an inventory shortage, for both new and existing homes, well before the pandemic, and COVID made it worse,” cautions George Ratiu, senior economist at Realtor.com. “It's going to take a while for us to get back to a more balanced 'normal,' even with an increase in new construction on the horizon.”

He makes a good point, especially considering that lumber mill shutdowns during the pandemic spurred a materials shortage that has caused new home prices to increase by $36,000. Things may get a bit more affordable, but it’s not likely that the increase in home listings will lead to much cheaper houses across the board (which is good news for sellers). If anything, consider it a sign for homebuyers everywhere that you’ll have more options to choose from, less of a battle to have your offer get accepted and fewer conversations that go like, “well, maybe we should consider the cottage that looks like something out of the Saw series, because hey, it’s the only thing in our price range on the market!” There are enough compromises to make during the homebuying process, after all.