After a year of hectic activity that has exacerbated the already existing housing shortage, offers are likely to rise soon, said analysts interviewed by Zillow.
A larger number of homes are expected to hit the market in the next 12 months, according to the company's third-quarter home price expectation survey. Industry experts believe that most of the new offering – an estimated 39.7% – will come from existing borrowers looking to move.
As the competition for listings wanes and consumer optimism rises, more homeowners will feel confident finding a new apartment and finally putting their homes up for sale, Nicole Bachaud, economic data analyst for Zillow, said in the report.
"This is welcome news for many potential buyers who should see more options to make their home hunting easier," said Bachaud. "Together with the expected moderate price increase in the coming months, the market is beginning to move towards a balance between buyers and sellers – although this middle ground is still a long way off."
Behind the expected wave of sellers entering the fray, 22.5% of inventory is expected to come from new builds, 12.2% from landlords and investors converting rents into units for sale, and 9.6% by homeowners who sell and become tenants.
As lumber prices gradually declined from record highs in May, construction starts in August were higher than expected, and builder sentiment rose for the first time in five months in September. However, labor and material shortages are likely to dampen the pace of new construction, according to Odeta Kushi, deputy chief economist of the First American State.
"The bottom line is that the housing market has been underdeveloped for a decade and builders can't close the gap between supply and demand overnight, but they are trying," Kushi said in a statement to NMN.
Meanwhile, only 5.4% of respondents to the Zillow poll said foreclosures would fuel the available housing supply. According to the latest data from the Mortgage Bankers Association, approximately 1.5 million borrowers remain indulgent as of September 12. Zillow predicts that an estimated 850,000 of these deferred borrowers will abandon their plans by November, about a quarter of which is for sale.