Housing Inventory Won’t Return to Pre-Pandemic Levels Until 2024, Experts Say
A panel of housing market experts polled by Zillow anticipate that housing inventory will return to pre-pandemic levels with a monthly average of 1.5 million units by 2024. Total inventory dropped from a monthly average of 1.6 million units in 2018 and 2019 to just over 1 million in 2021, and supply is falling even lower in 2022, Zillow reports.
The share of first-time buyers also fell from 45% pre-pandemic to 37% in 2021 as a result of record-breaking price growth and a lack of starter homes nationwide. Survey respondents expect the number of active first-time buyers to return to pre-pandemic levels in 2024, especially as more Millennials reach peak homebuying age.
The pandemic ushered in record-breaking price growth alongside rent hikes that made saving for down payments even more difficult. As a result, the share of first-time home buyers dropped from 45% in 2019 to 37% in 2021, according to a Zillow survey of recent buyers.
We asked the panel of experts when they expect first-time buyers will again make up as great a share of home buyers. The most common response (26%) was 2024, followed by 2025 (25%), by which time, cumulatively, 63% of respondents expect the share of first-time buyers to regain its pre-pandemic level. Eighteen percent of the experts polled did not believe the share of first-time buyers will rise above 45% until after 2030, despite millennials — the largest U.S. generation ever — aging well into their prime home-buying years before that time.