Most have heard about the nation’s housing shortage, but not about how bad it actually is. According to Freddie Mac, in order for the nation to no longer be in this housing supply shortage, there would need to be an additional 2.56 million housing units. Currently, almost every state is in a housing deficit, leaving many eligible and qualified buyers without homes to purchase.
Why is there a Housing Shortage?
With the Boomers not wanting to sell due to market uncertainty and the Landlords not selling so they can continue to bring in rental revenue, the typical starter home is just unavailable. In the
Triad, most buyers are in the price range of $150k-$250k.
While the low mortgage rates are fantastic and are currently helping keep the buyers out, it is also keeping people in their homes as well. For some families, it makes more sense to refinance rather than to sell and possibly not be able to find another home.
You may be thinking, “Well, why don’t they just start building more affordable housing?”
Unfortunately, that is a lot easier said than done. Materials, such as lumber, have gone up to nearly 80% more cost since April 2020 alone. With material costs on the rise, it makes it nearly impossible to build a standard 1200sqft home under $300k, where
most of the buyers are! Material costs aren’t the only roadblock builders are running into. When developers go to the municipalities to get their new neighborhoods approved, the elected officials end up requiring more regulations, such as minimum square footage or minimum lot size. They are only doing what their constituents want, but in turn it is shutting out the entry level buyers.
No one is entirely sure on what the future holds for the housing market or how to really fix this shortage. In the meantime, we are in a great seller’s market with historically low interest rates, making it a great (and interesting) time to buy and sell.
For more information feel free to contact one of our Ring the Bell Realty agents.