The housing industry is hitting its stride. Construction is up, demand is strong, and there’s an overall positive vibe heading into 2020. But one persistent issue remains and is getting worse: the housing shortage. The supply of homes for sale in December was down 8.5 percent annually, which is the lowest recorded level since Realtors began tracking it in 1982. And now that potential homebuyers are starting their search even earlier, the competition is sure to amp up, potentially pushing prices even higher. And if prices rise again, this could ice out some would-be buyers and deepen the affordable housing crisis. Builders will be able to alleviate the shortage with newly constructed homes in 2020, but it won’t come close to closing the gap anytime soon.
Buyers are trolling the nation’s neighborhoods looking for homes at the fastest pace in nearly two years, making an already critical shortage of inventory even worse.
Sales of existing homes rose a steeper-than-expected 3.5% in December compared with January, according to the National Association of Realtors.
Demand is surging because mortgage rates are about a full percentage point lower than they were a year ago, and the largest generation, millennials, are aging into their homebuying years.
That demand has pushed the supply of homes for sale down 8.5% annually to the lowest level since the Realtors began tracking inventory in 1982.