From the NYT:
Two years into the pandemic, rundown bungalows command bidding wars, buyers keep snatching up places they’ve never seen, and homebuilders can’t find enough cabinet doors for everyone who wants a new home. The median price for an American home is up nearly 20 percent in a year. The for-sale inventory is at a new low. And the hopeful buyers left on the sidelines have helped drive up rents instead.
All of this may feel unsustainable — the tight inventory, the wild price growth, the dwindling affordability. Surely something’s got to give.
But what if that’s not exactly true? Or, at least, not true anytime soon for renters locked out of homeownership today or anyone worried about housing affordability. There’s probably no quick reprieve coming, no rollback in stratospheric home prices if you can just wait a little longer to jump in.
“It’s not a bubble, it really is about the fundamentals,” said Jenny Schuetz, a housing researcher at the Brookings Institution. “It really is about supply and demand — not enough houses, and huge numbers of people wanting homes.”
Neither side of that ledger has a quick fix. More than six million existing homes sold in 2021, the highest number since 2006, according to data published Thursday by the National Association of Realtors. But that was still well short of satisfying demand. And there’s little evidence to suggest the nation is in a hurry to correct the imbalance between supply and demand.
“My pessimistic view is that the economy is perfectly capable of running with unaffordable housing,” said Daryl Fairweather, the chief economist at Redfin. This was evident over the last decade, she said, when affordability worsened even as the economy continued to grow. And that reality has enabled politicians and the public to largely neglect the issue of housing affordability.