Millions of Americans plan to buy homes at 2013 prices this year, The Hill reported on Tuesday, January 24, 2023 (read story here).
Good luck with that.
These shoppers hope to spend an average of $269,000 for a home; but the media U.S. home price last month topped $388,000. Why is there a $119,000 disparity between buyer expectations and reality?
Apparently many folks expect another housing crash. But while real estate sales have slowed, demand will exceed supply for years to come. The subprime collapse brought residential construction to a halt, but the population kept growing. Result: A long-term housing shortage.
That shortage still persists today. A survey suggests 30 million people intend to shop for homes in 2023, but only 6 million existing homes were sold in 2021. While prices have begun creeping lower in some higher-priced markets, that’s because a doubling of mortgage rates has forced buyers out of the market. The modest price declines seen so far aren’t enough to offset the higher borrowing costs.
And with housing supply still tight in a country with more people than houses, major price declines aren’t in the cards. The only good news for potential buyers is that home prices aren’t climbing anymore, and bidding wars have largely disappeared. But to find a bargain, you’ll have to go somewhere nobody wants to live.