Currently “For Sale” housing inventories are at record low levels. What could lead to more supply in the short term?
First, as the pandemic subsides, potential sellers will be more willing to list their homes (and allow strangers into their homes). So I expect more inventory later this year (See Some thoughts on Housing Inventory)
Second, an increase in mortgage rates (if this continues) would likely slow demand (usually demand picks up when interest rates first start to increase, as buyers are afraid of missing out on low rates). But if 30 year fixed rate mortgages move up closer to 4% (from the current 3.34%), this will probably slow demand.