The housing market has cooled since the intensity of the post-pandemic real estate rush, but the seller’s market we experienced has left us with plenty of discussion about what the nation’s housing inventory looks like. Do we have enough houses to meet buyer demand, or will seller listings continue to be snatched up before they hit the market?
The state of the housing inventory involves a variety of factors, but most experts agree that we’re currently low on homes considering the amount of people who want to buy them. We’ll evaluate what’s happening here and what trends may appear.
Why Is U.S. Housing Inventory So Low?
The housing market may be slowing a tiny bit with the recent increases in interest rates, but people are still buying at a steady pace. According to the S&P CoreLogic Case-Shiller Index, prices rose on average 19.7% in May.
Some experts think the housing market is on a self-correction course and prices and demand will balance out soon. Others argue we won’t see price stability in the long-term until we build more housing. Here are some things to be aware of as you move into the last part of 2022 and a new year.
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1. Ripples from the Great Recession
In 2008, many people lost their homes when the housing bubble burst. Approximately 10 million people faced foreclosure and the value of homes dropped around 33% or more. It takes a long time to recover from such a hit — many still feel the effects. Fewer homes were built after the recession as builders reeled from lower demand.
2. Need for New Construction
Thanks to the low interest rates of the last few years, there’s a surplus of homeowners. They spent more money than they otherwise would have because they could get more bang for their mortgage payment by building a larger home.
Now that interest rates are rising, there’s a true lack of affordable housing for…