As the number of active home listings hit an all-time low at the end of November, single-family construction broke an eight-year trend.
According to a statement from the National Association of Home Builders, in recent months there have been more single-family homes under construction than multifamily units.
The number of single-family units under construction increased 11.3 percent, to 1.2 million, and multifamily construction increased 12.9 percent for a total of 506,000 units.
There are now 28 percent more single-family homes under construction than a year ago, according to the statement, meaning increased inventory into 2022 despite increased building costs.
A Redfin report published at the end of November detailed the record inventory drop. In a four-week period ending Nov. 28, the number of active listings had a 23 percent decrease compared to last year, and a 42 percent drop from 2019.
The number of new listings also dropped 4 percent from 2020, but were 12 percent higher than 2019.
Experts say the number of homes for sale usually declines further in December, but demand has remained strong despite the lack of homes.
This demand contributed to the increase in home production, experts say. Interested homebuyers are turning to new construction rather than waiting for a home to become available.
Experts see multiple trends contributing to sustained market competition in 2022.
While home sales, prices, and mortgage rates are expected to continue increasing, so will rent prices.
Demand remains strong for first-time homebuyers, and increasing rent prices and a projected income increase will be a motivating factor in continuing the buying process.
Builders also will continue to ramp up production to improve home inventory.
While experts have been consistently predicting mortgage rate increases into 2022, the rates will be subject to continuing economic uncertainty.
There’s certainty that the rates will rise, but it may not happen quickly enough to hamper many buyers for a while.
As a result, potential homebuyers still are likely to be flocking to mortgage lenders to find the best rates and to acquire pre-approval prior to the home search.
Mortgage experts recommend pre-approval to smooth out the buying process and put an offer ahead of the rest. As the market slowly moves toward more of a balance, competition is expected to remain tight into the start of the year.
Homeowners interested in refinancing also still have plenty of opportunities, as home prices continue to increase and mortgage rates remain favorable.
So far, overall housing permits have increased 3.6 percent, prompting new-inventory optimism in the market.