Housing Market Faces Perfect Storm of High Demand, Low Supply, and Soaring Rates
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Today's housing market echoes that of the 1980s with high inflation, rising interest rates, and a demographic boom of new homebuyers. However, construction isn't keeping pace with demand.
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The 2000s housing bubble was the "antithesis" of today - overbuilding, loose lending standards, and overleveraged buyers. The downturns are opposites.
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Mortgage rates rose rapidly from 3% to 8% recently. That large relative change echoes the 1970s-80s shift from 10% to 18%, shocking buyers.
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generational conflict may be occurring as baby boomers "hoard" housing, but their downsizing as they age will be gradual over decades.
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Inflation causes a "lock-in effect" where homeowners don't sell, reducing inventory and preventing renters from buying homes as inflation hedges.
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