Record low mortgage rates are setting up this spring homebuying season to be one of the busiest in years. But homebuyers shouldn’t get too excited.

While the low rates will increase potential homebuyers’ purchasing power, historically low inventory will likely stymie home sales activity. Simply put there’s just not enough supply to keep up with demand.

“You can't buy what's not for sale,” Mark Fleming, First American chief economist, told Yahoo Finance’s On the Move, adding that rates are going so low that the potential first-time homebuyer has about $25,000 to $30,000 more purchasing power. “No matter how affordable it is or how much purchasing power you have, if you can't find the home you want to buy...we have to remember that homes aren't like iPhones. You have to find something that you want to buy, that you want to live in. And with low supply, it becomes that much harder to do so. That doesn't change when rates go down, and that's going to make even the competition for what is for sale that much more intense in the spring, which will drive prices up.”

The U.S. housing market is undersupplied by 3.3 million units, and the shortage is rising by about 300,000 units a year, wrote Freddie Mac’s Chief Economist Sam Khater in a new research report, adding that “more than half of all states have a housing shortage.”

Recent construction data is promising, construction spending in January jumped to its highest monthly gain in two years and even the December spending data was revised upward, according to the U.S. Commerce Department.

“We've actually seen, because of the mild winter, construction and permits and starts have been pretty good by the standards of January, February time frames,” said Fleming. “So, you know, while it's hard to see that, we just can't build them fast enough is really probably the problem, even though we're finding that the ability to do so more economically for that starter price point.”

But the coronavirus outbreak might threaten to slow down homebuilding activity and the housing market in general. And home prices are still on the rise and will likely continue to increase this year.

Amanda Fung is an editor at Yahoo Finance.

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