After a whirlwind two years for homebuyers, sellers, and investors alike, the housing market is finally beginning to cool, but prices are still rising while demand remains strong in most regional markets across the U.S., John Burns Real Estate Consulting reports. Both resale and completed home supply are over 80% below norm, a metric which could soften the blow of a drop in buyer demand.
In a booming rental market, price hikes are expected to continue, while some apartment and rental home submarkets could be at risk of oversupply if conditions persist.
Safeguards against uncertainty
- Very little money has gone into land development, limiting future lot availability. This will constrain future new home supply.
- Large home builders are now developing their own land, partially financed by land bankers.
- Big builders have also taken advantage of historically low interest rates and turned to the bond market. The top seven builders have about $25B in debt, with less than half due in the next 5 years.
