Fayetteville Arkansas, University of Arkansas--Old Main Overview

Fayetteville Arkansas, University of Arkansas--Old Main Overview
Overview of Fayetteville, AR

Friday, July 01, 2011

Housing Shortage -- Are You Kidding Me?

Can you wrap your mind around a possible housing shortage in the next decade? For the most part all we hear are statements of doom and gloom. You know what I mean: “Foreclosure rate remains high,” or “Another builder has gone bankrupt,” or “Home prices slip again.”

Indeed, the real estate market in general has taken a beating since the economy began to tank a few years ago. When unemployment began to climb, people were forced to change their living arrangements. Many young people continued to live with their parents instead of buying starter homes. Many older folks stayed in homes that no longer had mortgages. Still another group whose homes had been foreclosed were forced into rentals.

With housing inventories at all time highs, many builders stopped building new homes.

Now that the economic picture is getting brighter and interest rates on mortgages are very, very low, the cycle is beginning to turn.

A recent study from Harvard University indicates demand will call for 16 million new homes during the next 10 years. The demand will be fueled by increases in population and immigration, young folks looking for their first home, baby boomers wanting to downsize, and demand for second homes.

Rent prices have increased and if that trend continues, as seems likely, more renters will return to home ownership.

So, the demand for so many homes does seem possible, maybe not right away, but don't discount the possibility.

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