U.S. Housing Shortage Will Be Around Much Longer
Updated: Aug 17
The housing shortage that began before the pandemic will stick around for a long time as market demand soars, experts say.
As the economy continues to improve post pandemic, we’re going to see mortgage rates move up. However, the lack of supply and the overwhelming demand is something that will be with us for years to come.We are even seeing that home purchase applications and mortgage applications to refinance a home both are dropping, even though mortgage rates dipped.
We are at multi-year lows as far as new and resale inventory and it's going to be very difficult for us to make up the shortage.Home prices in the U.S. have risen significantly during the coronavirus pandemic, as booming interest for houses coincided with low inventory for sale. This has ignited affordability concerns from some observers who worry especially about first-time buyers being priced out.
One possible bright spot in the near term is that, in June, new listings had increased 5.5% year over year and 10.9% compared with May. Historically, low listings have been seen between May and June.
The low mortgage rates seen during the pandemic are a factor to consider when assessing the market, experts said.