Housing Shortage Facing Homebuyers And Skyrocketing Prices
This BREAKING NEWS ARTICLE Is About The Housing Shortage Facing Homebuyers And Skyrocketing Prices
The U.S. is facing a severe Housing Shortage Facing Homebuyers And Skyrocketing Prices. The housing market was booming prior to the coronavirus outbreak in February 2020. All states had their governors exercise their executive stay-at-home orders and were shut down. Unemployment rates hit historic lows. At its peak, over 50 million Americans filed for unemployment. The unemployment rate was under 3.5% prior to the coronavirus pandemic. At its peak, the unemployment rate is close to 20% in the U.S. However, the economy rebounded under the leadership of President Donald J. Trump and his administration.
Housing Market Booming Despite Political Unrest
The U.S. has a new president, Joe Biden. There is a lot of talk that Joe Biden and countless democrats have cheated in the 2020 election. Fact-checking is in progress and we will soon find out whether we have a real president or a fake president that cheated. Again, time will tell whether or not Biden and Harris cheated to get elected. The first nine months under the Biden Administration have been disastrous. The border wall construction has been halted and suspended indefinitely. Inflation has skyrocketed. Biden and Secretary of State Antony Blinken have decimated Afghanistan due to their poor leadership killing 13 Americans. The country is headed towards higher interest rates. However, the housing market is strong. There is a housing shortage in the United States. Mortgage rates are still at historic lows. The unemployment rate today is under 5%. The economy is booming despite the policies of Joe Biden and Kamala Harris which is setting the country back.
Strong Housing Market And Home Shortage
The housing market is fueled by the lowest mortgage rates in the history of the United States. Mortgage rates are under 3.0% for a 30-year fixed-rate mortgage. Never in the history of the United States have so many renters applied for a mortgage to purchase a home. There are more homebuyers looking to find a home to purchase than an inventory of homes. Demand is so strong, housing prices are rising like never before. Many apartment renters in mismanaged cities like Chicago are fleeing to the suburbs and buying homes.
Housing Shortage Is Skyrocketing Home Prices
Homebuyers are pulling the trigger to purchase a home today rather than waiting. This is mainly due to the lowest mortgage rates in history. 30-year fixed-rate mortgages are under 3.0% However, homebuyers are facing a major dilemma which is a major housing shortage and increasing home prices
George Makoutz is a veteran mortgage loan originator and a mortgage industry expert. Mr. Makoutz is also an associate contributing editor at Gustan Cho Associates. George said the following:
With buyers eager to take advantage of low mortgage rates the inventory of homes to buy is scarce. That’s driving up prices and threatening to derail the boom by pushing homeownership out of reach for many Americans. For homebuilders, the huge demand for housing is an opportunity to crank up construction and solve the inventory crisis. Instead, some are deliberately slowing things down as they grapple with supply shortages, surging lumber costs, and intense competition for labor and land. It’s smart business. But that means continued shortages and higher prices.
See the graph showing how the inventory of homes is getting scarce:
Piotr Bieda of Capital Lending Network is a real estate analyst who said most analysts expected the housing market to tank after the coronavirus outbreak in March.
- Not just analysts, but most homebuilders were bracing themselves for another housing meltdown worse than the 2008 financial crisis
- Things turned out the opposite way
- The coronavirus outbreak created a major exodus of city dwellers to the suburbs
- Renters in high priced apartments started migrating to the suburbs to get more homes for the money and more space
- Chicago, which is run by an incompetent Mayor, has never seen the number of taxpayers moving out of the city to the suburbs
Why would anyone live in a city like Chicago that has major riots, the highest murder rate in the nation, high crime rates, public corruption, high taxes, and incompetent politicians that keep on raising taxes and are clueless in running city government?
What Experts Say About The Shortage Of Home Inventory
Here is what Piotr Bieda of Capital Lending Network says about the housing inventory shortage:
There was pent-up demand for housing when the pandemic hit, after a decade when builders mostly focused on the higher-end of the market, constructing fewer, more expensive homes. Recently, they’d shifted focus to cheaper properties for the massive millennial generation now aging into homeownership. But with higher costs eating into profit margins, builders may once again chase the wealthy who want bigger homes with backyards and home offices. That comes as the inventory shortage has gotten even more acute. The supply of existing homes shrinking for years is at an all-time low. At August’s sales pace, it would take a little more than three months to run out of new homes for sale, the lowest level on record, according to government data dating back to 1963. That’s down from almost six months in February. Sales of existing homes jumped 10.5% in August compared with a year earlier, outpacing new home sales for the first time since 2015, according to Redfin. That came as fewer new homes were listed for sale. New home construction this year will hold steady at just under 900,000, about the same pace as in 2019. For 2021, the industry group forecasts that starts will increase slightly but will be held back by the cost and availability of building materials.
At the rate of home prices skyrocketing, it will shut many home buyers out of the market. The demand for homes is great. However, a severe shortage of inventory will skyrocket home prices where it will affect first-time homebuyers or homebuyers looking for affordable housing.
The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) have been increasing the maximum loan limits for the past four years.
This is because of the rapidly rising home prices. However, many homebuyers need to be concerned about if they can afford their new housing payment. They need to thoroughly go over their finances and budget and make sure they have the ability to repay. The chances are both HUD and the FHFA will be increasing the loan limits for both FHA and Conventional loans for 2021
Piotr Bieda of Capital Lending Network, Inc. said the following:
Builders can keep raising prices to stay ahead of costs, to a point. But some are raising them by as much as 2% a month. If that went on for two or three years, we’d be very concerned about affordability. Every time prices go up, it’s great for homeowners and bad for the renter who aspires to be a homeowner. Stocks of homebuilders have climbed in recent months as orders for new homes surged. The looming issue is that the demand for housing is outstripping supply at a time when construction has gotten more expensive.
Major national homebuilders are thriving with business. However, the cost of construction has skyrocketed due to the high cost of lumber and other home-building supplies. Due to the rising costs of lumber and construction materials, homebuilders have no other choice but to raise home prices. Homebuilders are hoping and praying the cost of lumber will drop significantly.