There’s a mismatch in the housing market. Demand is rising, yet homebuilders don’t have the capacity to create the supply the way they did in the boom years. They haven’t banked as much land, they haven’t filed the permits and they’ve become increasingly short of labor—one possible byproduct of the Trump administration’s crackdown on illegal immigrants. In fact, the nation is probably short about 700,000 homes on an annual basis. That explains why new home sales have been somewhat disappointing.
It also explains why sellers in many markets are now in prime position. According to Realtor.com, in December and January the supply of existing homes was 3.6 months, something that hadn’t happened since January 2005. In Seattle, for instance, the average time a house stays on the market is 36 days, compared with the national average of 90 days. In Dallas-Ft. Worth, it’s 42 days, according to Realtor.com. Combine that with the prospect of higher-priced mortgages thanks to the Federal Reserve’s decision to begin lifting interest rates and it makes buyers a little more motivated. “We’ve seen home sales surge because buyers are beginning to realize there is this expectation that mortgage rates will rebound: you might as well get in now,” says Bernard Baumohl, chief global economist at The Economic Outlook Group. He says prices are rising at twice the rate of inflation and more than two times the rate of average hourly pay. That’s bad news on the affordability front for first-time buyers who are trying to get onto the first rung of the housing ladder.
Click here for more articles from Time Inc.’s Looking Forward series.
But it’s great news for empty nesters and other homeowners looking to downsize. Even better, there’s less of a supply constraint because developers have targeted the boomer market by building high service, luxury condominiums in major markets. And why not, says Peter Wells, a partner at Real Capital Solutions, which is developing a luxury condo tower in suburban Dallas: “When [boomers] sell their big place, they’re cash rich and it becomes all lifestyle driven.” Spring is a traditional time for buying and selling homes, and this season stands to be a busy one.
- The Real Reason Florida Wants to Ban AP African-American Studies, According to an Architect of the Course
- Column: Tyre Nichols' Killing Is The Result of a Diseased Culture
- Without Evusheld, Immunocompromised People Are on Their Own Against COVID-19
- Here Are All the Movies and TV Shows That Make Up the New DCU
- TikTok's 'De-Influencing' Trend Is Here to Tell You What Stuff You Don't Need to Buy
- Column: America Goes About Juvenile Crime Sentencing All Wrong
- Why Your Tax Refund May Be Lower This Year
- Brazil Wants to Abandon a 34,000-Ton Ship at Sea. It Would be an Environmental Disaster
- The 5 Best New TV Shows Our Critic Watched in January 2023