To say there’s a housing shortage is an understatement…
There are more buyers in the market than there are homes by a wide margin. And last month, we saw another sign of that imbalance.
Mortgage finance company Freddie Mac recently came out with a shocking number. Homebuilders need to build 3.8 million single-family homes to meet current buyer demand in the U.S… marking a 52% increase in the housing shortage since 2018.
That’s a huge jump in just a few short years. And it highlights how extreme the imbalance is in the housing market today.
Right now, supply is near all-time lows. And that’s likely to send U.S. home prices even higher.
Let me explain…
The housing market might feel a bit crazy right now. Prices have soared to new heights in 2021. But higher prices alone don’t signal that a top is near.
In fact, those higher prices are likely to keep climbing.
When supply can’t keep up with demand, home prices are bound to rise. That’s economics in action. And today, housing supply remains near all-time lows.
We can see this through the U.S. Existing Home Sales Months Supply Index. This index measures how long it would take to sell the current supply of homes on the market.
Today, it would take just two months to sell off all existing inventory.