When home sales slow down, it’s easy to assume the reason behind the decline is fewer buyers in the market. But according to the latest release from Fannie Mae’s Economic and Strategic Research group, buyer demand is not the issue in today’s market. In fact, it’s the opposite. The group – which releases a monthly outlook covering their expectations for the economy and housing market in the months ahead – says the lack of available homes for sale is the defining feature of today’s housing market. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says the housing market’s supply issue isn’t new. “We began discussing our expectations of a supply shortage in late 2014, and it remains front and center in the housing market in 2023,” Duncan said. “The supply of existing homes is near the 2009 crisis low, and it’s showing no signs of easing. This puts the onus on home builders and can be seen in the construction data.” The low supply of previously owned homes for sale has slowed sales and kept prices high. It has also helped support more new home construction, which is encouraging for the market’s future. (source)
