It’s no secret that the housing market has experienced drastic changes since the start of 2020. After mortgage rates dropped significantly and demand raised substantially, median home prices were at an all-time high by the end of the year.
However, this trend looks like it’s going to be changing – and very soon. Currently, the number of homes for sale is up 30%, since it’s lowest point this past spring.
Some industry experts agree that a combination of regular seasonal market changes and pushback from homebuyers to continue paying such high prices has contributed to the influx of homes on the market. However, another reason could be that sellers are finally ready to sell, as the pandemic seems to have become more manageable.
With this, it is important to note that even more inventory is expected to enter the market as the mortgage forbearance program – or CARES Act – that was passed in late March of 2020, will begin coming to an end on September 30th, 2021. This program, which has allowed millions of homeowners to pause mortgage payments, has been a lifeline for many. And its end means that those who will stop receiving support may have no other option than to sell.
With 1.7 borrowers enrolled in the program, we can be sure that we will see a significant increase in homes for sale – but not all at once, and not right away.
The program is set to end in phases over several months, with the majority of borrowers being dropped at the end of September and the start of October.
This change is expected to be drastic, as Zillow estimates that 25% of the 1.7 million borrowers that are still in forbearance will likely list their home for sale, which accounts for 211,700 homes to enter the market in the next 2 months.
It is important to note that this influx in homes for sale does not mean that we should expect a housing crash, rather it will continue to push the market forward paired with the continuation of low mortgage rates.
This is great news for buyers looking to purchase a home and have been living in a seller’s market for the past 18 months.
More inventory = more opportunity to buy.