Over the past two years, the COVID-19 pandemic hit the housing market hard, upending everything from housing supply to the median home price, but according to The New York Times, no quick reprieve is in sight. Increased housing construction throughout 2022 will add some affordable housing to an overpriced market, but builders will likely struggle just to break even with soaring demand and a decades-old housing deficit.
Though home prices are still rising, buyers are showing no signs of backing down despite heavy competition from new market players like all-cash ‘iBuyers’ and institutional investors. As unfavorable market conditions are sustained for the second straight year, first-time buyers will likely have the most trouble finding and purchasing available homes.
“My pessimistic view is that the economy is perfectly capable of running with unaffordable housing,” said Daryl Fairweather, the chief economist at Redfin. This was evident over the last decade, she said, when affordability worsened even as the economy continued to grow. And that reality has enabled politicians and the public to largely neglect the issue of housing affordability.
“Another way to phrase that is people will still get up and go to their jobs, even if they’re housing insecure,” Ms. Fairweather said. “That’s one reason to think we’ll still just keep letting this problem get worse.”
Advertisement
Related Stories
Market Data + Trends
10 States Where Home Insurance Rates Have Risen the Most
Responding to the increasing number of natural disasters, insurers are hiking prices, with some states bearing the brunt more than others
New-Home Sales
Mortgage Rates Are Up but New-Home Sales Still Solid in March
Lack of existing home inventory drove a rise in new-home sales, despite higher interest rates in March
Labor + Trade Relations
Who's Earning What in Construction
Workers in construction management roles may earn a higher median wage, but on average, lower-paid occupations have experienced somewhat faster wage growth