Thanks to the combination of fewer homeowners listing their homes for sale and more people wanting to buy a new home, there are fewer homes on the market now than there have been at any point since at least 2012.
Relief may be on the horizon as new home construction rose in December to a pace not seen since late 2006.
Now, new analysis from the National Association of Home Builders suggests that the elevated home construction trend will continue for the rest of 2021.
In fact, NAHB Chief Economist Robert Dietz now expects single-family housing construction to reach levels not seen since 2008.
Dietz notes that single-family housing starts (defined as construction beginning on a new home) were up 11.7% in 2020 compared to 2019, for a total of 991,000 new homes built.
Dietz expects that figure to rise in 2021, topping 1 million new homes built for the first time in 13 years.
That many new homes hitting the market this year could be a significant boost to the housing market, which was negatively affected by low inventory for much 2020.
That drove home prices higher and higher, as competition for the available inventory was fierce in many cases.
Home sales also closed the year at a strong pace as millions of people reconsidered what home meant to them over the course of 2020. In fact, data from the National Association of Realtors showed that there were 5.64 million existing homes sold in 2020, the highest that figure has been since 2006.
Dietz expects both of those trends to continue in 2021 but notes that prices continuing to rise at a record pace could lead to some prospective buyers being priced out of the market.
However, with 1 million new homes expected to hit the market this year, some of those concerns may be mitigated.