Description: 

• The US housing market is facing a significant shortage of homes to meet the demand for new and resale properties. What’s causing this issue, and what can be done about it?
• This episode breaks down three key factors that have contributed to the housing shortage over the past decade.
  • Factor 1: Post-Financial Crisis – After the 2010 housing market crash, many home builders went out of business, and skilled tradespeople left the construction industry, causing a backlog in supply.
  • Factor 2: Surge in Demand – In 2019, a large wave of demand from people wanting to relocate, driven in part by the pandemic, pushed home prices up significantly, while mortgage interest rates also rose.
  • Factor 3: Supply Chain Issues – The pandemic caused significant delays in obtaining building materials, like lumber, which led to price increases and further slowed construction.
• These factors combined have led to a persistent shortage of homes, and it’s not something that can be quickly fixed. Housing construction is a lengthy process, and changes to the economy or supply chain can affect the timeline.
• Even attempts to adjust zoning laws will not solve all the underlying issues contributing to the shortage.
• The Bottom Line: The housing shortage is likely to continue, making homeownership more challenging due to higher costs and limited inventory.
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Links:

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