Jamie Rector | Bloomberg | Getty Images
On the dynamic between homes for rent and homes for sale
By Steve Cook | inman
Despite booming sales in recent years, new homes are not selling as quickly as existing homes.
A new study by one of the nation’s leading housing economists found that short-term transitions, such as the conversion of foreclosures to rental in recent years, are sensitive to changes in market conditions and can be reversed if markets return to their original dynamics.
When markets dynamics revert to ownership from rental, a number of properties change status quickly. The resulting inventory increase acts like a buffer on demand, which could delay the demand for new construction.
Over the past three years, new homes have been on fire, increasing every year. Last year they were up 12.2 percent over 2015 and reached the highest annual total since 2006. With every sales increase, new homes are helping to fill the inventory deficits that plague most markets.
However, sales could have been even better.
