The National Association of Realtors says that not enough new home construction is a big reason for the “persistent shortages and unhealthy price growth in many markets.”
After looking at 146 metropolitan statistical areas, the association concluded that homebuilding activity is underperforming for all house types.
But according to RealtyTrac, it isn’t the amount of homes that is the main issue with housing supply, but affordability. “The median sales price for existing homes amounted to $234,000 in July versus $285,900 for new homes. That’s a difference of $51,900,” RealtyTrac reports. “If there are problems with employment growth, student debt, and tight credit then surely those troubles limit the ability of buyers to purchase homes in general and higher-priced properties in particular.”