Ever wondered why finding a house to buy feels like searching for a needle in a haystack these days? It’s a legit question, and you might be thinking about waiting for better times, but hold on a sec – that might not be the smartest move. Here’s the lowdown.
First off, the housing shortage isn’t a new kid on the block. It’s been around for quite a while. Let’s dive into the reasons why we’re in this pickle, both in the long and short term.
Underbuilding Is a Long-Standing Problem
Not Enough Building Going On: One big reason we’re running low on houses is that builders haven’t been putting in the elbow grease in recent years. Check out this graph that shows the number of new single-family homes constructed over the last five decades, including the average (in red) over the long haul:
For 14 years straight, builders didn’t build enough homes to keep up with the usual average. That’s what we call underbuilding, and it’s left us with a serious housing deficit. Sure, things are getting back on track now, but it’s not a quick fix. This is a marathon, not a sprint.
Mortgage Rates Are Playing Tricks:
There are some other tricks being played in today’s housing market. One is the “mortgage rate lock-in effect.” What’s that, you ask? Well, some homeowners are stuck because they don’t want to move and get a higher mortgage rate than what they’ve got on their current pad. Check out this chart: may find themselves in this situation:
These folks are worried about the financial side of moving, but it’s essential to remember that your needs are just as important as the dollars and cents.
Media Hype is Scaring Us:
The media’s got a hand in this mess too. You’ve probably seen those gloomy headlines predicting a housing crash or shouting about a 20% drop in home prices. Spoiler alert: none of that happened. But the fear these stories stoke might have made you second-guess your plans. As Jason Lewis, Co-Founder and Chief Data Officer at Parcl, puts it:
“When you can’t trust what you’re hearing, real estate decisions start to look like a horror movie.”
This fear factor is shrinking the pool of potential buyers and sellers. But here’s the deal: the market’s not all doom and gloom, even if the headlines are. A good agent can set you straight.
What It Means for You:
So, how does all this impact you? Well, it depends on whether you’re trying to sell, buy, or maybe do both.
For the buyers out there: The slim pickings in the housing market mean you’ve got to cast a wide net. Explore different areas and housing types. A savvy real estate pro can help you navigate this maze and find the home that checks your boxes. They can also help you broaden your search if needed.
Sellers listen up: The current low inventory is your moment to shine. Your home will stand out in a market where less is more. A real estate agent can give you the lowdown on why selling now is a great idea. Plus, since many sellers are also buyers, your agent can keep you in the loop about the latest listings in your dream neighborhood.
In a Nutshell:
This housing shortage isn’t a newbie in town; it’s been causing headaches for a while. There are a bunch of reasons for it, both long-term and short-term. If you’re planning a move, do yourself a favor and get in touch with a real estate agent. They’ll be your go-to guru, breaking down how all this jazz affects you and keeping you updated on what’s up with the housing scene in your neck of the woods. When it comes to navigating the real estate maze, a trusted agent is your best wingman.