Relatively Affordable Cities Experiencing the Worst Housing Shortage
Housing inventory has been dropping for the past year, but July saw the worst shortage on record. Only 1.9 million homes were available in July, a nearly 20% drop, but in more affordable cities, the numbers are worse. San Antonio saw a 21% year-over-year decrease of homes in July. Baltimore’s housing supply plummeted by 21%. In these more affordable areas, houses are flying off the shelves, but in more expensive cities such as San Francisco, there are more homes for sale, according to Redfin. It’s a result of many different factors: more buyers than sellers, working from home, the desire for more amenities while stuck at home, and more.
Of the top 50 metros, 40 have seen supply growth rates decline since February. The number of homes for sale across the country has dwindled as record-low mortgage rates have sparked a deluge of homebuyer demand that hasn’t been matched by an equal increase in the number of people putting their houses on the market. At the same time, the pandemic has exacerbated the trend of Americans moving from expensive, coastal cities to affordable, inland places—intensifying the supply deficit in the latter areas. These factors have deepened an already-acute housing shortage set off by a homebuilding slowdown after the 2008 financial crisis and the increasing tendency of homeowners to hold onto their houses for longer.
Where Supply Is Shrinking
“There’s a perfect storm in the housing market right now,” said Jason Allen, Redfin’s market manager in Baltimore. “People are more comfortable staying in their homes; they’re investing in pools, offices and better backyards instead of moving. But at the same time, there are suddenly a lot more people who want those amenities, so we’re seeing this huge wave of buyers. We’re meeting far more clients who want to buy a home than sell a home.”