A look at Biden’s first week in office

This episode reviews last week’s inauguration of President Joe Biden, examining which housing issues the new administration has already taken action on.

Mortgage Tech Demo Day

Tune in to our live Virtual Demo Day on February 2nd to experience demos from the most innovative loan origination and valuation tech companies in the industry.

If consumers aren’t holding lenders back, then who or what is?

The challenge for lenders and investors is understanding how to meet borrowers where they are without layering on risk or getting bogged down in third-party intermediation.

HomeBridge’s Brian White on diversity at a practical level

HomeBridge's Brian “Woody” White discusses ways to increase diversity within the housing finance industry.

Real Estate

Here’s why there aren’t enough homes to buy right now

Homebuilding will continue to lag household formation, NAR’s Yun says

The housing market’s weakest link is about to get weaker as homebuilders stay on the sidelines amid the COVID-19 pandemic.

Housing starts that measure how many single-family homes builders break ground on probably will fall to 770,000 this year, the lowest level since 2015, as the economic fallout from the COVID-19 pandemic makes it tough to do business, according to a forecast from Lawrence Yun, chief economist for the National Association of Realtors.

Economists who at the start of 2020 were projecting the biggest year for homebuilding since 2007 now are saying construction won’t be able to solve the historic dearth of homes for sale. The 1.47 million properties on the market at the end of April was the lowest ever recorded for the month, according to NAR data.

“The lack of inventory is a major bottleneck to growth,” Lawrence Yun, NAR’s chief economist, said in an interview with HousingWire. “There is a tremendous amount of buyer interest, and the supply is not catching up with the growth in demand.”

Americans created 11.4 million households in the 10 years through 2019, according to Census data. Builders sold 5.2 million single-family homes in the same period. In the prior decade, they sold 10.4 million new houses, according to government data.

The shortage of homes for sale plagued the housing market long before the COVID-19 pandemic, Yun said. But, the supply disruptions and the lockdowns that ensued have only made it worse.

While the elevated unemployment rate in April and May are also a challenge to the housing market, reducing the number of people who qualify for mortgages to buy homes, the housing market still doesn’t have enough supply to meet the demand from the employed share of Americans who want to purchase properties, he said.

Next year should be better, said Yun, who is forecasting 940,000 single-family home starts for 2021, which would be the most additions to the housing market since 2007, the year before the financial crisis.

“The temporary disruptions due to economic lockdowns will hopefully all be made up for next year,” Yun said. “Demand is clearly there. Homebuilders will recognize that if they just build it, there will be people knocking on the door.”

Leave a comment

Most Popular Articles

Zillow: Expect another record year for home sales

Zillow predicts 6.82 million existing home sales in 2021, the most recorded in a single calendar year since 2005 and a 21.1% increase from 2020.

Jan 25, 2021 By

Latest Articles

The Fed plots a slow, stable path on mortgage rates

The FOMC left future economic policies virtually unchanged at its Wednesday meeting, indicating plans that short-term mortgage rates will stay low for years to come.

Jan 27, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please