POWER REAL ESTATE
Housing supply is finally improving as high prices and rising rates weigh on sale
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or the past two years, there has been an imbalance between the supply and demand sides, mainly due to the Covid-19 pandemic. During the first pandemic wave, many people lost their employment which effectively meant that their affordability was deeply compromised. During this time, many people started counting on the government to support their living, and many others relied on their long-term savings. In such conditions, home buying ability was largely affected!
14 | JUNE 2022
And it makes sense! During the pandemic years, many homebuyers were priced out of the market. Prices rose so fast that many low-tomoderate income people could hardly keep up. The rates are rising, which means many people are getting out of the market. Sellers are scared and are releasing their homes for sale to capture the high prices before the market normalizes. We all knew that it was just a matter of time for the market to stabilize; after all, when there is a high swing, it is likely that there will be a corrective measure. While this corrective measure might not be significant enough to favor many buyers, it at least gives the market a breathing space.
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April data suggests a positive turn of events is on the horizon for weary buyers: If the trends we’re seeing now hold true, we could potentially see year-overyear inventory growth within the next few weeks, said Danielle Hale, chief economist for Realtor.com.
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For many years, the housing supply had been low due to the high mortgage rate, high property prices, and other factors such as low construction rate and government policies, among others. According to a response to Realtor.com data, the supply of homes has finally started to improve as the monthto-month mortgage cost on a $400,000 residence, with a 20% down cost, which is now greater than it was in March 2020, according to a response to Realtor. com data.
Entering 2022, the economic condition of most people began improving, especially in the months immediately after the vaccination had been rolled out. During this time, many people began resuming work, and to date, there seems to be a state of normalcy. In fact, many areas are recording high employment stats, which means many people who were locked out of the market during the pandemic years will be making a comeback.
