Do we have a housing shortage?
By Guest Columnist Mallory Savner, Licensed realtor, Veterans Realty
It is no surprise to anyone that the housing market is still fiercely competitive. This is a nationwide occurrence. There simply are not enough homes for sale on the market nor being built to keep up with the demand.
According to the National Association of Realtors (NAR), there were four offers, on average, per home sold in the month of February. I would say that is pretty on par with what we are seeing locally, as well. Currently, homes are on the market sixteen to thirty days before going under contract. Locally, we’ve seen many homes going under contract in a matter of hours.
According to NAR, “a balanced housing market is one that requires the inventory of homes for sale to be equivalent to about six months of the monthly pace of demand.” In January of this year, there was around 1.7 months’ worth of inventory on the market nationally. In short, we have a major housing shortage.
Mortgage rates have started to inch up recently, but still remain relatively low. The Fed has maintained that they will keep rates low in coming years, and economists expect rates to remain around 3.3% for the remainder of the year. The low interest rates offer more affordability and allow consumers to more easily purchase a home, but it increases demand in an already competitive market. Other factors contributing to housing demand are a strong economy and a decreasing unemployment rate. This all contributes to increasing home prices.
NAR, along with other housing advocates, are working towards solutions and strategies to help alleviate the pressures of the housing shortage. The first step is awareness. You can’t solve a problem you don’t know exists.
By addressing and recognizing the housing shortage, local agencies can work together to find a solution that works for their community. Solutions include looking at current constraints on new construction that hinder the building process and re-evaluation of land use and zoning requirements in local governments.
At the end of the day, housing markets are hyper local. What works in one area of the country won’t necessarily work in another, but we can begin by starting the conversation.
So, what do you think? Do you think we have a housing shortage, and what could be done in our community to address this issue?