US housing supply reaches nearly 40-year low

Increased demand is driving home prices up

National /
Sep.September 21, 2020 10:45 AM
The number of single-family homes on the market hit historic lows in July, driving prices up (iStock)

The number of single-family homes on the market hit historic lows in July, driving prices up (iStock)

The coronavirus pandemic has exacerbated the severe housing supply shortage in the U.S., with the number of homes on the market reaching historic lows.

At the end of July, the National Association of Realtors found that there were 1.3 million single-family homes on the market, the lowest figure for any July since 1982, the Wall Street Journal reported. And in the week ending Sept. 12, the number of available homes was down 29.4 percent from the same time last year, according to Zillow Group.

“Every year we think, ‘We’re hitting new record lows, it can’t get worse,’ but then it does,” said Danielle Hale, chief economist for Realtor.com.

The shortage has led housing prices to spike: In July, the median price for existing homes jumped past $300,000, an 8.5 percent increase from a year ago, according to NAR. That’s a hindrance for buyers who were lured to the market by lower interest rates, but may be put off by higher prices.

The post-pandemic shortage is a case of supply and demand: There are more buyers looking for homes, and fewer sellers listing them. The high demand for contractors, painters and other home-improvement workers has led to delays in getting homes ready to sell, said Beth Traverso, managing broker at Re/Max Northwest Realtors. Once homes list in her Seattle suburbs market, they find buyers quickly, she told the Journal.

But the lack of homes for resale has led to increased demand for new-build homes. Single-family housing starts were up 4.1 percent in August, according to the Commerce Department. [WSJ] — Akiko Matsuda


Related Articles

arrow_forward_ios
A rendering of 165 Broome Street (Credit: Handel Architects)
Nonprofit plans affordable housing development near Essex Crossing
Nonprofit plans affordable housing development near Essex Crossing
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
RE/MAX CEO Adam Contos (Facebook)
RE/MAX revenue ticks up in Q4 but profit sinks
RE/MAX revenue ticks up in Q4 but profit sinks
Meredith Marshall (Photo by Emily Assiran)
“We need more housing”: Q&A with BRP Companies’ Meredith Marshall
“We need more housing”: Q&A with BRP Companies’ Meredith Marshall
(iStock/Illustration by Kevin Rebong for The Real Deal)
State will use undercover testers to combat housing discrimination
State will use undercover testers to combat housing discrimination
Zillow COO Jeremy Wacksman (Zillow, iStock)
Zillow using Zestimate to streamline cash offers for some homes
Zillow using Zestimate to streamline cash offers for some homes
Home sales were the busiest January on record, but still the fifth month of decline in a row. (iStock)
Pending home sales fall for fifth consecutive month
Pending home sales fall for fifth consecutive month
Don Lemon and Tim Malone with their apartment at 2280 Frederick Douglass Boulevard
Making Lemonade: Don Lemon breaks even on Harlem condo sale
Making Lemonade: Don Lemon breaks even on Harlem condo sale
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...