{"id":5337,"date":"2019-07-21T10:22:01","date_gmt":"2019-07-21T14:22:01","guid":{"rendered":"https:\/\/dankrell.com\/blog\/?p=5337"},"modified":"2019-07-21T10:22:10","modified_gmt":"2019-07-21T14:22:10","slug":"housing-inventory-shortage-causes","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2019\/07\/21\/housing-inventory-shortage-causes\/","title":{"rendered":"Housing Inventory Shortage Causes"},"content":{"rendered":"\n
\"housing
Mover rates (infographic from census.gov)<\/figcaption><\/figure><\/div>\n\n\n\n

A common complaint from home buyers is that there is\nlack of quality homes for sale.  A fact\nthat most overlook is that home sale inventory has been relatively low since\n2011.  The shortage has been attributed\nto many things including, home prices, economy, mortgage interest rates, jobs,\netc.  However, a Freddie Mac report\nissued earlier this year pinpoints a major cause of the ongoing inventory\nshortage.  And according to the report,\nthe housing shortage may get worse before it gets better. <\/p>\n\n\n\n

A post-recession housing inventory shortage was actually predicted in 2010<\/a> by Brian Wesbury, chief economist for First Trust Advisers (Housing Shortage Coming In 2011<\/em>; Forbes.com; February 15, 2010).\u00a0 Wesbury\u2019s industry startling prediction was based on statistics that require an average of 1.5 million homes to be added to the housing inventory each year just to be on par with population growth.\u00a0 At that time, housing starts and completions were only a fraction of the 1.5 million target.\u00a0 <\/p>\n\n\n\n

Since then, housing market inventory<\/a> has been low relative to the housing market prior to the great recession.\u00a0 A lack of inventory has been attributed for inconsistent home sale stats this year, as well as previous years.\u00a0 And although there have been a few years of post-recession record home sales, home sales have struggled for ten years to surpass pre-recession numbers.\u00a0 <\/p>\n\n\n\n

A study by Freddie Mac<\/a> discusses one of the major causes of the recent housing shortage that has been impeding the real estate market, which is the growing trend of \u201caging in place.\u201d\u00a0 The study, published by Freddie Mac Insights earlier this year (While Seniors Age in Place, Millennials Wait Longer and May Pay More for their First Homes<\/em>; freddiemac.com; February 6, 2019), is fueling an ongoing debate of the current housing inventory shortage.\u00a0 <\/p>\n\n\n\n

Aging in place is term given to aging home owners who stay on their homes as long as possible.\u00a0 Rather than moving to retirement communities or other stereotypical older adult housing, seniors are staying put.\u00a0 This trend is confirmed by a survey conducted by AARP <\/a>that indicated \u201c3 out of 4 adults age 50 and older want to stay in their homes and communities as they age\u201d (2018 Home and Community Preferences: A National Survey of Adults Age 18-Plus<\/em>; aarp.org; August 2018).<\/p>\n\n\n\n

To highlight the impact of the current trend of\naging in place, the Freddie Mac report pointed out that the home ownership rate\nfor seniors aged 67 to 85 only dropped 3.6 percent, while the previous\ngeneration experienced a 11.6 percent drop in homeownership for the same age\nspan.  A major revelation was that the\ncurrent homeownership rate for seniors aged 81 to 85 is almost 15 times greater\nthan the previous generation (for the same age span).<\/p>\n\n\n\n

The Freddie Mac study looked at subdued millennial home buying trends and looked at who lived in the homes that millennials could have purchased.\u00a0 The results indicated that seniors born after 1931 stayed in their homes longer, which resulted in higher homeownership rates compared to previous generations.\u00a0 According to the study, \u201cWe estimate that this trend accounts for about 1.6 million houses held back from the market through 2018, representing about one year\u2019s typical supply of new construction, or more than half of the current shortfall of 2.5 million housing units\u2026This additional demand for homeownership from seniors will increase the relative price of owning versus renting, making renting more attractive to younger generations…<\/em>\u201d<\/p>\n\n\n\n

By Dan Krell
Copyright \u00a9 2019<\/p>\n\n\n\n

Original located at https:\/\/dankrell.com\/blog\/2019\/07\/21\/housing-inventory-shortage-causes\/ <\/p>\n\n\n\n

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Disclaimer<\/a>.\n This article is not intended to provide nor should it be relied upon \nfor legal and financial advice. Readers should not rely solely on the \ninformation contained herein, as it does not purport to be comprehensive\n or render specific advice. Readers should consult with an attorney \nregarding local real estate laws and customs as they vary by state and \njurisdiction. Using this article without permission is a violation of \ncopyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

A common complaint from home buyers is that there is lack of quality homes for sale.  A fact that most overlook is that home sale inventory has been relatively low since 2011.  The shortage has been attributed to many things including, home prices, economy, mortgage interest rates, jobs, etc.  However, a Freddie Mac report issued … <\/p>\n

Continue reading “Housing Inventory Shortage Causes”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[567,234,39,174,270,405,233,288,337],"tags":[966,893,490,466,905,797,593],"class_list":["post-5337","post","type-post","status-publish","format-standard","hentry","category-economics","category-economy","category-first-time-home-buyer","category-first-time-homebuyer","category-home-buyer","category-homebuyer","category-housing","category-housing-market","category-housing-shortage","tag-economics","tag-economy","tag-home-buyer-2","tag-housing-market-2","tag-housing-shortage","tag-real-estate","tag-real-estate-market-2"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-1o5","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/5337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=5337"}],"version-history":[{"count":2,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/5337\/revisions"}],"predecessor-version":[{"id":5341,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/5337\/revisions\/5341"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=5337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=5337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=5337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}