The latest read on surging American home prices comes Tuesday from the S&P/Case-Shiller Home Price Index. But recent increases are not because buyers are abundant and excited. For the moment, weak supply is driving the spikes more than strong demand. Here’s why supply is low:
1. Developers are building more rental apartments, which means fewer new homes on the market.
2. Some current homeowners who would like to sell aren’t putting their homes on the market. Many families can’t qualify for mortgages under today’s stricter lending standards, which means they’re staying put instead of selling and trading up.
Click the media player above to hear more.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.