The world has been dealing with a significant health crisis since the beginning of 2020. This has provided the American bear troll crowd numerous opportunities to pontificate about a likely long-lasting depression. If you bought into the theories being peddled by this crash-cult crowd (who, by the way, have been infecting the discourse of economics since the creation of social media and YouTube channels) then you would have believed that the second housing market bubble crash was imminent during 2020.
But the U.S. economy recovered quicker than anyone ever imagined — well, almost everyone (wink, wink). Life is much better today than it could have been, but we are now suffering from what can only be called a first-world problem in the U.S. housing market.
Here is the problem: In the years 2020 to 2024, Mother Demographics is providing the U.S. with the most significant number of adults of first-time home-buying age ever in history — and this is during a time when we are enjoying the lowest mortgage rates. With this one-two punch, is it any wonder that the U.S. housing market has outperformed all other economic sectors during COVID-19?
If every cloud has a silver lining, then every advantage has its disadvantage. The advantage of having great housing demographics and low mortgage rates at the same time is that we will have stable demand for homes during this period. Think of it this way: Every time a person buys a home, a potential homebuyer is removed from the market for the time that person (or family) remains in the home. Since housing tenure (the length of time a person stays in a home) has been increasing, that potential homebuyer is being removed from the market for a longer time.