Study analyzes housing prices, supply and demand

As the economy recovered, and prices started to rise in places like Boise, Denver and Boston, there were a glut of homes that sat for years up until 2013, 2014 and even 2015, until hedge funds and other large scale investors began scooping them up, and turning them into rentals. Sometimes, the former homeowner rented their home back from the new owners.

And now, as if by magic, the U.S. is experiencing an extreme shortage of housing of all kinds: first-time buyer houses, affordable housing, trade-up properties, rental properties, two- and three-family properties, and multi-family buildings.

But is the shortage of housing caused by historic low interest rates or a lack of building, or both?

The study argues that there has been a decades-long gap in investment. That the U.S. faces “an acute shortage of available housing, an ever-worsening affordability crisis, and an existing housing stock that is aging and increasingly in need of repair — all to the detriment of the health of the public and the economy. The scale of underbuilding and the existing demand-supply gap is enormous and will require a major national commitment to build more housing of all types by expanding resources, addressing barriers to new development and making new housing construction an integral part of a national infrastructure strategy.”

The Realtors, whose membership is said to be at or near an all-time high and who clearly benefit from having more housing product to sell and lease, are proposing an unprecedented push on the supply side: more and better funding capabilities, changes in zoning to accommodate more units in smaller spaces, converting underutilized commercial space to residential homes, and using the might of the federal government “to help address construction capacity challenges such as rising construction costs and labor and materials shortages.”