May 05 2023

9 tips for homebuyers in a low inventory market


Can’t find a house? When housing inventory is low, here’s how to come out on top.

Across the U.S., homebuyers are asking: Why can’t I find a house? The reality is, we’re still in a seller’s market. Though buyer activity has slowed, there isn’t enough housing inventory to meet demand. While low inventory can present challenges, it doesn’t necessarily mean you have to put your dreams of homeownership on hold.

It’s possible to find a home you love, even when options are limited.

A quick overview of why housing inventory is so tight

housing inventory

The low levels of housing inventory in today’s market aren’t a new occurrence. Our inventory shortage has been building over time.

Low housing inventory is likely fueled by two factors:

  1. New construction has fallen behind. New home construction was at a high throughout the housing bubble of 2008. This surplus of new builds created oversupply, causing home values to drop and contributing to 2008’s housing crisis. For more than a decade since, builders have struggled to pick up the pace. Housing inventory entered the pandemic at a deficit.
  2. The pandemic brought a buyer boom with it. One effect of 2020’s pandemic was a dramatic drop in mortgage rates. Another was a renewed emphasis on the functionality of our living space. Many homebuyers on the fence decided to take advantage of rock-bottom rates and purchase. As a result, already limited housing inventory levels plummeted by more than half.

According to the latest Existing-Home Sales report from the National Association of REALTORS®, there’s currently only a 2.6-month supply of available houses. A 6-month supply is usually needed to sustain a healthy or neutral market in which buyer demand is satisfied.

Thankfully, all hope isn’t lost. While forecasts vary,’s 2023 Housing Forecast predicts that housing inventory will rise by nearly 23 percent compared to 2022 levels. And as we enter the summer market, new listings are expected to become available.

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9 workarounds to help you find your dream home

If you’re feeling stuck, it may be time to look for new ways to gain traction:

1. Get *pre-approved first.

In a seller’s market, house hunting before you’re *pre-approved is no longer an option. Some real estate agents may even require it. A *pre-approval will tell you how much house you can afford, while also adding weight to your offer. You can make your offer more attractive, communicating to a seller that you’re ready to close, by using Academy’s exclusive early approval program, *Pre-Approval+.

2. Increase your down payment.

Like early *pre-approval, a larger down payment also looks favorable to a seller. It suggests you have the funds to bring the sale through to closing. While many low and no down payment loans exist to help keep homeownership affordable, it can be smart to beef up your down payment if you’re able.

3. Start with a starter.

Several factors support entering the market if you’re ready to do it. Though mortgage rates have risen, they’re still historically low. Housing prices are also gradually rising—indicating that once you become a homeowner, you’ll start building equity. Talk with your Loan Officer about if buying a starter home now and leveraging equity to trade up later makes financial sense.

4. Expand your search radius.

Are you feeling frustrated by the lack of listings in your area? Ask your Realtor to widen your home search radius. For some buyers, this might mean relocating. For others, listings may improve by searching in nearby suburban and rural areas. (This might make you eligible for a no down payment USDA Loan too.)

5. Shop new builds.

More new homes could be coming to a neighborhood near you, offering perks like the ability to customize and integrate energy-efficient features. Academy Mortgage offers Extended Rate Locks that can be used while a home is under construction, with the option to float down if market rates decline.

6. Stay flexible with renovations.

Depending on where you live, you may still see multiple offers on a house. One way to sidestep the competition is to consider a home that needs some love. In the past few years, homebuyers have been more willing to take on repairs. Using an “all-in-one” Renovation Loan could give you the funds to flip a fixer-upper.

7. Look at old listings.

There’s nothing a seller wants less than to have their home sit on the market. You—and your agent—can use this to your advantage. A listing may become “stale” after three to five weeks. If a seller has priced their home too high, it could be your chance to swoop in. Just make sure to check thoroughly for any deal-breakers that may have deterred other buyers.

8. Inquire about withdrawn listings.

Similarly, your agent may be able to do some digging in the MLS for listings that have been withdrawn or have expired. Some of these failed listings may also have been priced too high. If that’s the case, a seller who’s thrown in the towel might be eager to negotiate.

9. Write a rock-solid offer.

This one comes down to the skill of your agent and how much you’re willing to give. A competitive offer might include a bid at or above asking price; an escalation clause, noting how much extra you’re willing to pay above the highest offer; and potentially an appraisal gap clause, where you’ll agree to cover the difference if a home appraises at less than your offer.

We’re serious about making your dreams come true

Need help navigating today’s market? Looking for guidance from someone you can trust? Connect with a local Academy Loan Officer who cares about getting you home.

*Pre-Approval+ is not a commitment to lend. All mortgage products are subject to credit and property approval. Rates, program terms, and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Additional conditions, qualifications, and restrictions may apply. Please contact Academy Mortgage for more information. MAC424-1486254.