April's red-hot housing market saw nearly half of homes sell in less than a week, Zillow says
- Zillow found almost half the houses on the US market in April sold in less than a week.
- It also found that 76% of homes were sold in less than a month - a 16% boost from the same time last year.
- Supply of new houses is failing to meet supply, with housing starts falling 9.5% in April.
There's a major housing shortage in the US, with housing starts falling 9.5% in April as demand for new homes continue to surge. It's so bad that nearly half the houses on the market are being snatched up in less than a week.
Treh Manhertz of Zillow's research team reported on Friday that in April, 47% of homes were on the market for less than a week before going pending, with 76% of homes on the market for less than a month. This is a boost from April 2020, when the housing market came to a near halt, with just 30% of homes going pending in less than a week, and 60% within a month.
Separately, sales of existing homes fell in April, Insider's Ben Winck reported on Friday, further illustrating how much the lack of supply is squeezing homebuyers.
"This incredibly fast-moving market is undeniably stressful for buyers and a good number of sellers too, who may feel on top of the world when they list their home and get a quick offer but then back at the bottom if/when they find themselves needing to find another home to buy," Manhertz wrote.
Zillow also found that in 27 of the nation's largest metropolitan areas, a majority of homes went under contract in less than a week. In Columbus, Denver, and Salt Lake City, it took less than seven days for 70% of homes to go under contract, and "the share of homes going pending in less than two weeks was higher year-over-year in April in every single top-50 metro in the country except Memphis."
The "need for speed," as Manhertz put it, comes at a time when there aren't enough houses to meet the high demand of home buyers. Insider reported on Wednesday that the housing shortage could last for years, citing Goldman Sachs projections that millennial homebuying should continue while starts will increase to the insufficient level of 1.5 million per year, and foreclosures won't meaningfully impact supply.
And Insider's Ben Winck reported on Thursday that fixing the housing shortage is proving too expensive right now for homebuilders, given that soaring lumber costs and lack of available building plots are holding homebuilders back.
More than two-thirds of over 100 economists and experts nationwide told Zillow they expect inventory to begin growing again later this year or in the first half of 2022, which would help slow down competition.
In the meantime, though, economists predict housing prices will continue to soar through 2023 as demand outpaces construction.