In October 2017, the U.S. housing market had an imbalanced supply of existing homes for resale. From baby boomers aging in place, to costly building regulations, there are six major contributing factors to the shortage.
NerdWallet and MarketWatch highlight six major factors contributing to the U.S. housing market shortage, including mortgage interest rates. Since 2014, the interest rate on outstanding mortgages averaged 3.8 percent, per the Department of Commerce. Frank Nothaft, chief economist for CoreLogic says, “The inventory of homes for sale, which is already very low, is likely to remain that way if we see higher interest rates,” Nothaft said.
When planning and zoning officials limit the number of houses that can be built in a neighborhood, or set minimum square footage for houses, they’re limiting supply and making homes more expensive. “It’s neighbors who want their property values to go up ... This is the pressure behind a lot of the most damaging regulations out there,” says Miriam Axel-Lute, associate director of the National Housing Institute.
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