Some thoughts on increasing the Homeowner Housing Supply in the Short Term

by Calculated Risk on 4/07/2021 11:09:00 AM

Currently “For Sale” housing inventories are at record low levels. What could lead to more supply in the short term? 

Here are the organic reasons.

First, as the pandemic subsides, potential sellers will be more willing to list their homes (and allow strangers into their homes).  So I expect more inventory later this year (See Some thoughts on Housing Inventory)

Second, an increase in mortgage rates (if this continues) would likely slow demand (usually demand picks up when interest rates first start to increase, as buyers are afraid of missing out on low rates).  But if 30 year fixed rate mortgages move up closer to 4% (from the current 3.34%), this will probably slow demand.

Third, homebuilders are responding to demand, and ramping up production.
What else could lead to more supply?
Government policy could help.
In many higher priced areas, people stay in their large homes to avoid

Keep reading this article on Bill McBride - Calculedriskblog.

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