What Do Supply and Demand Tell Us About Today’s Housing Market?
Real Estate
Real Estate
Understanding the impact both supply and demand have can provide the answers to a few popular questions about today’s housing market:
Why Are Prices Rising?
According to the latest Home Price Insights report from CoreLogic, home prices have risen 18.1% since this time last year. But what’s driving the increase?
Recent buyer and seller activity data from the National Association of Realtors (NAR) helps answer that question. When we take NAR’s buyer activity data and compare it to the seller traffic during the same timeframe, we can see buyer demand continues to outpace seller activity by a wide margin. In other words, the demand for homes is significantly greater than the current supply that’s available to buy (see maps below):
This combination of low supply and high demand is what’s driving home prices up. Bill McBride, author of the Calculated Risk blog, puts it best, saying:
“By some measures, house prices seem high, but the recent price increases make sense from a supply and demand perspective.”
The supply of homes for sale will greatly affect where prices head over the coming months. Many experts forecast prices will continue to increase, but they’ll likely appreciate at a slower rate.
Buyers hoping to purchase the home of their dreams may see this as welcome news. In this case, perspective is important: a slight moderation of home prices does not mean prices will depreciate or fall. Price increases may occur at a slower pace, but experts still expect them to rise.
Five major entities that closely follow the real estate market forecast home prices will continue appreciating through 2022 (see graph below):
If you’re waiting to enter the market because you’re expecting prices to drop, you may end up paying more in the long run. Even if price increases occur at a slower rate next year, prices are still projected to rise. That means the home of your dreams will likely cost even more in 2022.
Stay up to date on the latest real estate trends.
Mortgage rates have ticked up slightly over the course of the past year, and coincidentally, so has the median sale price of a home in the US.
Adults ages 60 to 78 appear to be brushing off current housing challenges more easily than other age groups. Find out what baby boomers—and other age groups—are expect… Read more
One of the headline issues in the real estate industry over the past few years has been, of course, the affordability (or rather the unaffordability) of homes. Unfort… Read more
Mortgage rates have ticked back up to roughly the same levels, as they were at prior to the Fed issuing its first rate cut in September.
Romantic Places to Visit in 2025 Silicon Valley is known for innovation, technology, and a fast-paced lifestyle, but it also offers some of the best romantic date spot… Read more
You’ve got questions and we can’t wait to answer them.