Are you hoping to see your real estate inventory increase soon? There’s some bad news here.

There’s a reason the past few years have been difficult for prospective homebuyers. Not only have high lending rates made mortgage contracts expensive, but there has also been a huge shortage of homes on the national market.

Buyers struggling with limited housing inventory in 2023 may be hoping for better news in 2024. Unfortunately, we’re starting the year with expensive mortgage rates, so inventory may remain stagnant for some time. Many current homeowners are likely to retain their existing homeowners because they have rates that are much lower than what is currently available.

Of course, existing homes aren’t the only option for buyers. As new construction comes to the market, buyers have additional opportunities to make offers.

But the problem is that new construction has slowed significantly toward the end of 2023. And if things don’t improve, buyers could be in for a very disappointing 2024.

Housing starts decline in December

Housing starts, a measure of new construction activity, fell 4.3% in December compared to November, according to the Census Bureau. This means new construction slowed at the end of 2023, which doesn’t bode well for 2024 either.

Now the good news is that December permits were up 1.9% from November. However, the start of housing construction Active A construction permit is more of an indication that construction is planned. So this is not the best news for those looking to increase their real estate inventory in the short term.

How to Buy a Home When Inventory Is Low

Buying a home in a market with low inventory can be a huge challenge. But it is also something that can be overcome.

First, if you don’t have homes available in the zip code you most want, consider being open to trying out different areas. Being a little flexible with where you live can open up more opportunities.

Also, consider homes that need work if the problems in question are ones that can be fixed over time. In other words, if you want a home with a large backyard and the only available property in your preferred neighborhood and price range has a yard the size of a postage stamp, don’t make an offer. You can’t magically transform a small yard into a large yard.

But let’s say your dream home has a finished basement, and there are only homes in your area with unfinished basements. It’s a solvable problem. This problem may take time and money to resolve, but it is a solvable problem. So don’t ignore a house that has flaws that can be worked on over time.

Becoming a home buyer is not an easy task when housing inventory is limited. But that doesn’t mean you’re doomed. Open to a variety of neighborhoods and properties.

Also think about it this way: The longer it takes you to find a home, the better your chances of being able to cover the down payment. Being able to buy a home can make it more affordable.

Keep in mind that over time, mortgage rates are likely to decrease, which can increase your inventory. And what about the construction permit I mentioned earlier? Once work begins, we tend to end up with more homes on the market. So, if you can’t actually find the right home to make an offer on at the moment, patience may be your best bet.

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