The end of the foreclosure moratorium and rising interest rates may help ease the shortage of available homes for sale.

Since we constantly remind our readers that it is impossible to predict the future, we wonder who predicted that the listing shortage would become even more severe in 2022? Most of us were looking for an easing of the listing shortage as the new year arrived.  But here we are with one-quarter of the year behind us and there are a ton of buyers out there, but not enough listings.

This does not mean that this shortage will remain severe throughout this year.  There are several factors that have the potential to increase listings in this market.  For one, the federally mandated moratorium on foreclosures has been lifted and forbearance plans are ending. While foreclosures add bank sale inventory, many with equity are likely to sell their homes to avoid foreclosure.  The increase in interest rates coupled with higher home prices will likely keep some potential buyers out of the market, reducing demand.

While these and a few other factors are likely to help ease the shortages, it is not likely that they will contribute to a sudden turn in the market.  It is more probable that these changes will be gradual and as sellers realize that appreciation has slowed down, even more will sell because they sense the “top of the market.”  Keep in mind that unforeseen events are also possible.  From pandemics to wars—we have experienced these types of factors as well.  The bottom line?  There is no instant fix for the listing shortage, but these severe conditions are not likely to be with us forever.