The housing inventory crisis continues to block many potential homebuyers out of the market, but new Zillow data shows that could be about to change.

The housing market has been experiencing an inventory crisis as homebuyers are hungry for more homes than are available for sale. Horror stories are mounting of buyers paying thousands…even hundreds of thousands above asking price. 

Even TikTok has taken notice:

@johnsonfilesAnybody else in this crazy fight for a home?? #realestate #housingmarket #comedy #funny #realestatetiktok #realestatehacks #houseshopping #fixerupper♬ original sound – The Johnson Files

But an incoming surge of new real estate listings could change today’s inventory crisis. 

New data in Zillow’s Monthly Market Report suggests the inventory crunch bedeviling home searchers may be starting to turn around as record appreciation of home values makes it more enticing to sell.

Although continued demand for homes pushed total for-sale inventory down 1.1 percent in March, the monthly decline was the smallest seen since July, Zillow’s report shows. That’s thanks to a rush of new inventory (rising 30 percent from late February to late March), which signals sellers are following the traditional pattern of listing their homes in spring. Over the three months, inventory has dropped by about 8 percent each month. 

“March often sees a boost in inventory, and the return to some seasonal norms is a positive sign that supply is beginning to catch up with demand,” Zillow Economist Treh Manhertz said. “With home values skyrocketing, vaccination rates rising and employees getting long-term guidance on where they can work, we expect an increasing number of homeowners to join the market and list in the coming months. That will come as welcome news to home shoppers who are seeing bidding wars and homes plucked from the market weeks faster than usual.”

And home prices are rising at a record pace. In March, home prices rose a record 1.2 percent month over month to $276,717. This is the largest monthly rise in Zillow records going back to 1996 and a roughly $3,200 jump in value from February for the typical home. Annual appreciation rose to 10.6 percent, the largest jump in 15 years. 

Zillow economists forecast 6.4 million homes will sell in 2021 – up 13.5 percent from 2020 and the strongest year for sales since 2006 – and expect home values to rise 10.4 percent over the next 12 months.

The Mortgage Bankers Association also expects homebuying to pick up, forecasting that the mortgage market will see record originations on the purchase side this year. The MBA announced Thursday at its Spring Conference and Expo 2021 that purchase originations are on track to grow 16.4 percent to a new record of $1.67 trillion in 2021.

In their most recent forecast, Fannie Mae and Freddie Mac said the housing market is about to face a slowdown due to decreased refinances driven by higher interest rates, but they each predicted a strong increase in purchases. That means the two mortgage giants expect to see a lot more homebuyers enter the market in 2021.

Email Kelsey Ramírez

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription