So, there’s an article in the Portland Business Journal:
The housing permit issue for new residential units across the United States declined for the second year in a row. In 2023, it fell to a total of 1.47 million permits.
The Portland Housing Permit Hit 10-Year Low, Portland Business Journal
To give you a reference point, the U.S. gets 1.0 to 1.7 million For Sale Listings every year. The highest was in 2017 with 1.73 million listings. That number went down in the summer of 2021 with 1.2 million listings and on October of 2023 had 1.1 million listings. Looking at the current data, it’s projected to be about 1.2 to 1.3 million listings in 2024.
As you can see, even in 2017, we didn’t have enough homes. There were more buyers than the listings at 1.7 million. Now, we’re close to 1.2 million listings. So, we need another 500,000 more listings to meet the demand. This is one of the main reasons why the price is still staying very strong.
The two biggest housing market drivers are Supply and Demand and Mortgage Interest Rates. In my opinion, other data doesn’t really matter. Supply and demand and mortgage rate. That’s it. Just looking at the inventory, we’re 500,000 homes less than what we need based on the 2017 standard.
With the population growth, and, I know it’s a pretty controversial issue, but a lot of illegal immigrants are coming in, which will probably drive the rental market. And it’s going to actually drive more demand on the purchasing/buying market as well. Economical, inflation, job market, etc., these other factors don’t really matter. Though job market is kind of important. It is still related. However, there are so many buyers who are not affected by the job market, especially the baby boomers. There’s a lot of money and they are still looking to buy for themselves to downsize or upsize. It may also be for their Gen Z kids to help them on their down payments so that the kids can buy their own home. So, there is a lot of money that is not affected by the economical data.
So, just look at the supply and demand, the rental price, and the interest rate, and you can kind of guess what’s going to happen in the real estate market.
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