By Robert Dietz | NAHBNow
A number of unsustainable trends have developed in the housing market. The combination of a decade of underbuilding, favorable demographics, historically low interest rates, and a shift in consumer preferences have pushed single-family housing demand to the strongest levels in over a decade.
However, there is simply not enough resale inventory to meet demand. Existing single-family inventory in March stood at a very lean 2.1-month supply — less than half of what a healthy market needs. Consequently, median resale pricing increased 17.2% year over year to more than $329,000. This magnitude of price growth — far in excess of underlying income growth — is not sustainable over the long run.