There has been a housing shortage in Albuquerque and the rest of the United States for decades, which has been building and worsening. In light of what’s happening in real estate and in the broader economy, though, discussing the housing shortage is particularly interesting.
Housing prices soared during the pandemic. The limited number of homes on the market led to bidding wars.
Currently, the market is cooling and price increases are slowing, with many predicting a housing crash. Nevertheless, there may not be a crash as we might expect given the housing shortage. Inventory shortages make this a unique situation.
How Bad is the Housing Shortage?
Because of the shortage, there is still demand despite rising interest rates and high home prices. According to a senior economist at the National Association of Realtors, there appears to be no end in sight to the housing shortage. Experts will tell you there is a shortage of anywhere from two to nearly six million newly built homes in the U.S. According to the National Association of Realtors, 5.5 million houses are needed.
In 175 markets across the country, the NAR uses a housing shortage tracker which compares supply and demand based on the number of permits issued for single-family houses for every two new jobs. Despite the shortage, cities of all sizes are feeling its effects, with major cities such as Albuquerque experiencing the highest levels of underbuilding.
At one point, the housing shortage in the United States seemed confined to the coasts and the southwest area of the country. Now, the lack of housing production affects almost every state and metro area in the U.S.
Are There Solutions?
Experts are concerned that rising interest rates will make the problem worse. The solution some are proposing is zoning. Single-family housing shortages are usually associated with land-use restrictions.
What About the Future?
Despite rising interest rates and prices, the chief economist of the National Association of Home Builders predicts that the supply of homes will remain tight for some time to come. Due to higher interest rates and higher construction costs, an economist recently predicted a significant decline in single-family homebuilding next year.
Assuming a 10% down payment, monthly mortgages are $1,000 higher than a year ago. Federal Reserve Chair Jerome Powell spoke recently, saying the housing market may need a correction to improve affordability. Some analysts anticipate the interest rates will start to ease in 2024, which will reinvigorate the housing market, but until then, it may be weak, which will keep prices high and supply low and likely facilitate an ongoing shortage.
No matter how the market for homes turns in Albuquerque, Sandi Pressley and her team are the most qualified agents in New Mexico to help you find the perfect home. You can count on their experience to help you realize your dream of owning a home in any market.
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