Demand Soars Housing Faces 4 Million Home Crisis
Understanding the Impact of the Housing Shortage
The shortage of available homes has several significant implications. First and foremost, it has led to a sharp increase in home prices. According to data from the National Association of Realtors, the median existing-home price for all housing types in September 2023 was $359,000, a 13.3% increase from the previous year1. This price hike can be attributed to the basic economic principles of supply and demand, where limited supply and high demand drive prices upward.
Furthermore, the housing shortage has intensified competition among buyers. Many potential homeowners find themselves in bidding wars, often having to offer above the asking price or waive contingencies to secure a property. This competitive environment can be daunting for first-time buyers or those with limited budgets.