With Limited Inventory, Buyers Are Competing for an Aging Housing Stock

For two decades, builders have confronted an unfavorable business landscape with a lack of skilled labor, low availability, rising land, strict regional building regulations, and an ongoing supply crisis. As a result, inventory is disappearing, and buyers are facing record high prices and a tight competition for a limited supply of existing homes rather than new construction. The total share of buyers who purchased a new home in 2021 was just 15%, down from 28% in 2003 but up from a low of 13% in 2019, the National Association of Realtors reports.

With limited new home construction, the average age of homes purchased is becoming older. In 2021, the typical home that was purchased was roughly 28 years old, compared to adolescent property ages averaging 18 years just a decade prior. First-time buyers are feeling the pressure of a heated housing market, and with limited budgets, younger generations are the most likely to purchase aged fixer-uppers.

Perhaps not surprising, the younger the buyer, the older the home purchased. Young buyers are more likely to feel the financial pressure of rising home prices and the lack of affordable inventory and are more willing to buy a fixer-upper. Eleven percent of Young Millennials (ages 22 to 30) purchased a previously owned home to DIY a fixer upper compared to just 3% of buyers over the age of 66. Repeat buyers in the market are more likely to have equity from their past home and are able to purchase newer homes that may need less work once the buyer is in.

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