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Is there an end date to the housing shortage?

Well hopeful yes.

The supply of homes across the country is up for the first time in nearly three years.

Nationally, the number of homes for sale in June increased 2%, the first increase since July of 2019, according to a new Redfin report.

Supply issues have plagued the real estate market throughout the pandemic, making it difficult to impossible for buyers to find the home of their dreams as supply struggled to keep up with increased demand.

The buildup in supply is due to a combination of increased mortgage rates, high housing prices and the economy – all factors pushing more buyers out, which in turn is bringing more balance to the market.

That shift impacted both the number of sales and prices. June home sales fell almost 16% from last year, the largest decline since May of 2020, according to the report. Prices are also impacted. Despite the double-digit growth in home prices, the 11% increase from last year is the smallest in nearly two years, according to the report.

Redfin chief economist Daryl Fairweather said the country’s economic woes have cooled the housing market and are likely to continue dampening demand.

“The Fed has signaled it may increase interest rates further to combat stubbornly high inflation, which could harm consumer confidence, and lower stock prices mean fewer prospective homebuyers can afford a down payment,” Fairweather said. “I advise sellers to commit: If you decide to sell, do it quickly before demand falls further. And price carefully — this is not the time to test the waters. You’ll do more harm than good if you overprice and have to do a price reduction or take the home off the market.”

Markets in Denver and Indianapolis grew the fastest last month with half of all homes on the market pending in just five days. The next fastest were Grand Rapids, Michigan; Omaha, Nebraska; and Oklahoma City, which were on the market a median of six days.

Rochester, New York, had the most competitive markets in June, as 80.5% of homes sold above list price. That was followed by Worcester, Massachusetts, at 76.8%; Oakland, California, at 76.2%; Buffalo, New York, at 75.4%; and Hartford, Connecticut, at 75%.

The highest home price growth was in North Port, Florida, where home prices rose 29.7% from last year to $480,000. That was followed by Cape Coral, Florida, at 27.7%; Tampa, Florida, at 26.1%; Fort Worth, Texas, 24.2%; and Knoxville, Tennessee, at 24.1%. The only metro that saw declines in June was San Francisco, where home prices fell 0.5%.

Updated: Boston Real Estate Blog 2022

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Question: Is there an end date to the housing shortage? The video below will answer that Boston real estate question.

  • The housing shortage that began before the pandemic will stick around for a long time as market demand soars, Taylor Morrison CEO Sheryl Palmer told CNBC on Wednesday.
  • With “multiyear lows” in new and resale inventory, Palmer said, “it’s going to be very difficult for us to make up the shortage, the deficit that we’ve been building up for more than a decade now.”

Boston real Estate Housing Shortage

The housing shortage that began before the pandemic will stick around for a long time as market demand soars, the chief executive of homebuilder Taylor Morrison told CNBC on Wednesday.

“As the economy continues to improve, we’re going to see mortgage rates move up, and I think that should be expected. They’re not going to stay under 3% forever,” CEO Sheryl Palmer said on “Closing Bell.” However, she added, “the lack of supply and the overwhelming demand is something that will be with us for years to come.”  

Earlier Wednesday, the Mortgage Bankers Association’s seasonally adjusted index showed that mortgage demand decreased for the second week in a row this week, dropping by 1.8% to their lowest level since the beginning of 2020. Home purchase applications and mortgage applications to refinance a home both dropped for the week, even though mortgage rates dipped. 

Despite those developments, Palmer expressed confidence in the “robust housing market” and sustained demand across all areas and consumer types. 

“Certainly we are seeing some numbers around mortgage applications, but I think we really have to separate the supply and the demand that we’re seeing out there,” said Palmer, who has led Arizona-based Taylor Morrison since 2007.

“We are at multiyear lows as far as new and resale inventory, and, honestly, it’s going to be very difficult for us to make up the shortage, the deficit that we’ve been building up for more than a decade now,” she said.

Home prices in the U.S. have risen sharply during the coronavirus pandemic, as booming interest for houses coincided with low inventory for sale. That’s sparked affordability concerns from some observers who worry especially about first-time buyers being priced out.

Growth in housing inventory has slowed over the past decade in the aftermath of the 2008 housing crisis, creating an “underbuilding gap” of 5.5 million to 6.8 million housing units across the country since 2001, according a recent report from the National Association of Realtors.

“Additional inventory is the solution to all that ails us at this moment,” Coldwell Banker CEO Ryan Gorman told CNBC last week.

One possible bright spot in the near term is that, in June, new listings had increased 5.5% year over year and 10.9% compared with May, according to Realtor.com. Historically, low listings have been seen between May and June.

The low mortgage rates seen during the pandemic are a factor to consider when assessing the market, Palmer said.

“From an affordability standpoint, a consumer buying a [$300,000], $400,000 house today versus a year ago, their payment is going to be less,” she said. “Consumers change their behavior, and they’re not extending themselves the same way you might have always seen years and years ago. We actually see the consumer has a lot of room in what they can afford to buy and what they’re buying.”

Real Estate FAQ

How long will the housing shortage last?

The housing shortage that began before the pandemic will stick around for a long time as market demand soars, Taylor Morrison CEO Sheryl Palmer told CNBC in 2021

Will Boston real estate mortgage rates go up in 2021?

“As the economy continues to improve, we’re going to see mortgage rates move up, and I think that should be expected. They’re not going to stay under 3% forever,” CEO Sheryl Palmer said on “Closing Bell.”

Did the pandemic cause housing prices to rise?

Yes, home prices in the U.S. have risen sharply during the coronavirus pandemic, as booming interest for houses coincided with low inventory for sale. That’s sparked affordability concerns from some observers who worry especially about first-time buyers being priced out.

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Is there an end date to the housing shortage?

This week, Byron Lazine and Nicole White discuss the latest on NAR’s controversial address proposal, how long the housing shortage will last and staging in a seller’s market.

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