Demand for homes has been hampered by short supply
It’s a big week for housing data: We get housing starts from the U.S. Census Bureau on Tuesday and existing home sales data from the National Association of Realtors on Thursday.
The housing market is in a weird place. In 2012, demand for homes started rising. The economy was recovering from a recession, and people and investors were ready to buy houses again, said Skylar Olsen, director of economic research at Zillow.
“That was also coming at a time when, demographically, millennials were first starting to hit those homebuying ages,” Olsen said. “So millennials were first starting to enter their early 30s.”
The problem was — and continues to be today — that there aren’t enough houses on the market to meet demand. So prices are way up.
“And it’s discouraging buyers across the income spectrum, but particularly the first-time buyer,” said Susan Wachter, a real estate and finance professor at the University of Pennsylvania’s Wharton School.
She said prices are so high that demand for homes has been falling lately.
One way to address this affordability problem is to build new, affordable houses. The numbers we get this week on housing starts will tell us if that is happening.
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