The #1 Reason It Is Difficult to Find Your Dream Home
The #1 Reason It Is Difficult to Find Your Dream Home
![]() The headlines in real estate today all revolve around one major point: there is a shortage of homes available for sale. Price appreciation is accelerating again because there is a shortage of homes available for sale. First-time buyers are taking longer to purchase a home because there is a shortage of homes available for sale in the lower price points. Boomers are staying in their current homes longer because there is a shortage of homes available for sale to which they would move. In certain markets, affordability is becoming more challenging because there is a shortage of homes available for sale. What's the major reason for this lack of housing inventory?The issue was examined in a recent article by the National Home Builders Association (NAHB). In the article, Robert Dietz, Chief Economist for NAHB, explained:
Here are the single-family home construction starts by decade for the last six decades: Below is a graph showing the number of starts per every million in population. The last decade shows that starts per population were less than half the average of the previous five decades. There's good news coming!The NAHB article explains that there is light at the end of the tunnel. How confident home builders are in the housing market is a great indicator of how much building is about to get started. The NAHB/Wells Fargo Housing Market Index (HMI) gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair, or poor. The survey also asks builders to rate traffic of prospective buyers as high to very high, average, or low to very low. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. Here are the HMI readings going back to 2008:
The increase in housing starts has already begun. According to the January report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, single‐family housing starts were up 11.2% and attained the highest level in thirteen years. Bottom LineWhether you're a first-time buyer or a seller thinking of moving up or down, 2020 could be your year with more new construction homes coming to market. |
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