Severe Housing Shortages Continue June 7, 2022

It is not news that there is a housing shortage.  However, some recent studies show that the shortages is many markets is more severe than previously estimated.  In many of the hottest markets, there is less than a two month supply of homes on the market.  Meaning, if all homes that are for sale are sold, and zero new homes are put on the market during the time the existing homes for sale are sold, in two months there would be zero homes available on the market to purchase.  A normal housing market is more like six to 8 months.

Why?  Why is the housing market so crazy?  Why are people buying homes like popcorn at the movies?  Here are some reasons:

1. Better Technology  – It’s easier than ever to shop for and find homes.

2. Low Interest Rates for a long period of time – Mortgager Interest Rates spent longer than ever at lower-than-ever levels.  Owners who refinanced or purchased a new home at these rates have little incentive to give up their mortgages.

3. Remote Work – More and more companies are allowing their employees to live wherever the want and work remotely.  The pandemic was a major cause of this.

4. Supply Chain Problems – Land, labor, and material shortages only hurt housing availability further.

5. Sellers Staying Put – See number 2 above, but also consider that a starved inventory situation only creates an additional reason for sellers to stay put.  It’s a snowball situation