Business & Investment

Some Thoughts on Increasing Homeowners’ Home Supply in the Short Term

Currently, “for sale” home inventories are at record lows. What could lead to more supply in the short term?

Here is an organic reason.

First, as the pandemic subsides, potential sellers will be more willing to list their homes (and allow strangers to enter their homes).So I’m expecting more inventory later this year (see) Some thoughts on housing inventory).

Second, rising mortgage rates (if this continues) can slow demand (usually buyers are afraid to miss low interest rates, so demand is high when interest rates first start to rise. Will recover). But when the 30-year fixed rate mortgage approaches 4% (From the current 3.34%), This will probably slow down demand.

Third, homebuilders are meeting demand and increasing production.

What else could lead to more supply?

Government policy may help..

In many high-priced areas, people stay in large homes to avoid paying capital gains. Once you abandon all capital gains in your primary home (for the elderly), you will have more supply to the market. These older people may then move down or into the retirement community.

Some argue that this only works for the wealthy, but that’s not true.

Click the graph to see the enlarged image.

I put this figure together in 2007 to describe a missing mover, and that’s true if you can free your luxury home.

If the landlord of a single-family home or condominium sells a rental property this year, it may be helpful to offer a tax break to the landlord.

Many single-family homes and condominiums have been converted into rental units. In 2015, Residential economist Tom Lawlor estimates From 10.7 million units in 2000, 17.5 million renters occupied a home in the United States. Many of these homes were purchased by investors. Most of these refinancings were low-end, which limited supply to first-time buyers.

Limited-time tax cuts for these landlords will free the home for first-time buyers.

I think inventories will increase later this year, but policies may help.

Some Thoughts on Increasing Homeowners’ Home Supply in the Short Term

http://feedproxy.google.com/~r/CalculatedRisk/~3/xKke2WmKNPw/some-thoughts-on-increasing-homeowner.html Some Thoughts on Increasing Homeowners’ Home Supply in the Short Term

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