Exploring the Population Growth and Housing Inventory Trends

Why have home prices continued to rise despite economic fluctuations? And, why will that most likely continue? A key part of the answer lies in two critical and interrelated factors: the steady increase in population and the constrained pace of home building post-Great Recession.

As illustrated in the chart above, the U.S. population has seen a notable increase from about 301 million in 2007 to approximately 340 million today. This growth reflects a sustained demand for housing due to both natural population increase and immigration.

Contrasting sharply with this demographic growth, the inventory of existing homes tells a different story. After peaking at around 4 million homes in the early 2000s, the housing inventory experienced a significant decline post-Great Recession and has struggled to recover, hovering around 1 million homes in recent years.

In simple terms, the supply of available homes to buy has dropped by nearly 75% since 2007, while the population has grown by 135!

Impact of These Trends on the Housing Market

Supply and Demand Imbalance: The substantial disparity between rising population numbers and the sluggish housing inventory is a primary driver of the current high home prices. As more people vie for fewer available homes, the competition drives prices upward.

Market Implications for Buyers and Sellers:

Buyers: The market dynamics make it a challenging environment for buyers, especially first-timers, as they face limited options and increased competition.

Sellers: Those looking to sell are in a favorable position, potentially benefiting from higher sales prices and quick closing times due to the low inventory.

Why homeownership still beats renting?

Equity: Over 45% of the average American's net worth is in their home equity.

Wealth: The average homeowner's net worth is 38 times that of the average renter.

Appreciation: Homes have appreciated every year except 1990 and 2007-2011.

Conclusion

The ongoing demand, driven by population growth against a backdrop of limited housing supply, suggests that home prices may continue to appreciate. This is NOT 2008.

This was written and sent to me from Mortgages by Scott Mooresville NC - Scott Hastings . He is excellent and I highly recommend him.

I hope this helps those who are waiting for rates to come down see that is an unwise path. Give me a call to help you find your next home. #kathybyrnesrealtor