Buyers are out in full force, so what gives? Why is housing inventory so low despite the high demand? It usually takes a few external factors to change the housing market as it has in recent months. Here are some possible explanations for why fewer people are listing their homes despite the promising upward trend of eager homebuyers:

1. Uncertainty - Homeowners are uncertain about their financial future and afraid to take the risk. 
2. Low Rates - Owners are enjoying low mortgage rates that they fear will go away after the pandemic. Also, they may have recently refinanced due to the low rates. 
3. Baby Boomers are Homebodies - Older generations (Baby Boomers especially) are settled in and content in their current residence. 

1. Uncertainty Surrounding Finances and Employment

Finances and employment are two key considerations when buying or selling a home. Although plenty of people are lining up to buy a home, it's the current homeowners who are content to stay where they are right now. Uncertainty has made current homeowners settle in, and they're prepared to ride out the pandemic in their current homes. 

Also, the idea of selling their home is tied to finding a new place to live. If the inventory is already low, they'll need to know where they're going to move before selling their current home. If they can't afford any of the houses on the market or can't find any they like, they'll probably wait until they can.

Unemployment

COVID-19 has thrown a wrench in many homeowners' financial plans. Whether it has impacted you directly or not, everyone has been holding onto their wallet a little tighter since the pandemic hit. You may hear stories about record-high unemployment rates, or you've been impacted yourself. Either way, most people don't want to make a big financial decision during a time of severe uncertainty. 

Financial Stability

Even the fear of potential unemployment can cause homeowners to rethink selling their homes. They know that what they're doing right now is working, and as long as they can keep on the same course, they can survive. Financial security is the first step to buying or selling your home. During COVID-19, it may be the case that many homeowners don't feel financially stable enough to sell their homes. It's relatively expensive to prepare your home for sale if you're going to do it right. Therefore, homeowners must be in a stable financial position, which is less common during a pandemic, leaving so many unemployed. 

Health Concerns

Concern for health and safety is an easy explanation during a pandemic. Simply put, some people fear the uncertainty that comes with an invisible virus to which there is no known cure. Some people choose to put a hold on listing their home because they don't want other people touring their house. It's an unfortunate reality that has caused many homeowners to hold off on selling their homes. 

Loan Forbearance

Homeowners who have experienced financial hardship due to COVID-19 have been able to reduce or even delay their monthly mortgage payments due to the CARES Act. Mortgage companies have agreed to work with homeowners who might be having trouble making their payments. Instead of selling their homes to get a smaller monthly payment, homeowners can delay their payments for an amount of time that is agreed upon between the mortgage companies and their clients. So, many people may be taking advantage of this forbearance and staying in their current homes.

2. Owners are Enjoying Low Mortgage and Refinance Rates

Mortgage interest rates have been trending downward for the past several years. Homeowners have enjoyed record-low interest rates, which might explain why so many new people are interested in buying who have previously rented. Also, there are tons of advertisements saying, "It's a great time to refinance your home!" While that may be subjective, many homeowners have opted to take advantage of the low refinance rates, which may be why they're not selling. 

When you've been living in your home for a few years, you may qualify for a lower rate through refinancing. Homeowners might have decided to refinance for a lower rate or even cash in on their built-up equity. Either way, it wouldn't be financially wise to move soon after refinancing, so homeowners are holding off on any dreams of moving into a bigger home to save some money. Homeowners know that mortgage and refinance rates are at all-time lows, so they're saving money instead of moving on to their next home.  

3. Older Generations are Settled In

Millennials are moving out of the city and are ready to start their lives in a single-family, suburban home. So, why is it so hard for them to find a home right now? One possible explanation is that Baby Boomers are happy with their current homes and have no interest in moving. Baby boomers still own most single-family homes, and they're not putting them up for sale. Millennials are the largest population and are trending toward becoming the largest group of homeowners. 

Until recently, tons of millennials have chosen to rent rather than buy. They are coming upon the age where they have more money, and they've started families. The demand has steadily increased as Millennials are taking over the homebuying industry. The supply hasn't been able to keep up with demand because Baby Boomers still own a majority of the single-family homes and are content to stay right where they are. 

Millennials are having to find other options like renting or building new homes. Unfortunately, it takes more time and money to build a new home than to buy an existing one. Millennials who can't afford to build a new home may be stuck with renting until the Baby Boomers start selling their homes again.