Housing Supply & Demand Explained in 1 Graph
And why house prices are so erratic
Housing supply increases slow and steady. The total supply of housing only increased 1.6% in 2005, at the top of a HUGE building boom.
Housing demand is erratic, and it can destabilize home prices, the U.S. economy, and especially, first-home buyer families who buy near the top.
If we want more stable home prices, we need to make the demand for homes more stable because there’s NO WAY housing supply can match the volatility of housing demand.
See also, “HUGE Mismatch Between How Fast Housing Supply and Housing Demand Can Change.”
It’s probably the most viewed post on RealEstateDecoded.com.
I’m planning to start posting here again this year, especially using videos to try and explain things better. Let’s see if it happens. – John
Always love your no nonsense data driven approach for the market
“The total supply of housing only increased 1.6% in 2005, at the top of a HUGE building boom.”
So what were they building? 🤔