How Did We Get Into A Housing Shortage and What Does The Future Look Like?
We're all aware that there is a housing shortage by this point. But why is there a housing shortage, and how long can we expect it to last? What does it mean for homebuyers? Here's what you need to know
What is causing the housing shortage?
There are many factors as to why we're now seeing a housing shortage; however, here are a few of the critical points to understand:
New construction of homes hasn't kept up with demand for years. The Great Recession in 2008 led to the end of many construction companies, and the Millennial Generation was expected to be a generation of renters.
Now we're faced with the largest generation of Americans in history, Millennials, who are in their prime to buy homes.
The pandemic has led to labor shortages and supply chain disruptions, which has also slowed the construction market.
There's a low supply of homes for sale. People are staying put for now.
Real Estate isn't just housing for families. Renting out homes is also a revenue stream. Many homes that do hit the market will become investment properties.
How do you buy in this competitive market?
Preparation is key. Before looking at homes, the first thing you should do is to get pre-approved by a lender. Making sure you understand what you can afford and getting pre-approved are crucial to success when buying in this competitive market. The pre-approval process doesn't just let you know how much you can feasibly and responsibly spend on a home, and it also allows your Loan Expert to suggest ways to improve your finances, seek out grants, and go over loans that fit you and your circumstances, and so much more. In a competitive time, you need a team that supports you and can help navigate the challenges and help you put your best offer forward. Rushing into a home loan with the wrong lender can affect your homebuying efforts and may affect your ability to get into a home.
What does the future of housing look like?
Realtor.com recently produced their Spring 2022 Home Sellers Report with their predictions for the rest of 2022
Over two-thirds of homeowners planning to sell in 2022 are likely to list by August. This might mean that there could be some relief in the inventory shortage this Spring and Summer.
80% of homeowners sold at or above their original asking price. This means that it's even more important to make sure you have a handle on your finances and what you can afford.
43% of homeowners planning to sell in 2022 expect prices of $350,000 and below. If affordability is a concern for you, almost half of the homes coming to the market could be just what you're looking for.
Ready to get prepared for your homebuying journey? Call the Wood Team today to learn how we can help you get into a new home.