New construction has slowed, supply has dwindled, and housing prices are on the rise. What does all of this mean for the state of the housing market for the rest of the year?
Lydia DePillis presents four things you need to know in this CNN Money article:
1. New home construction
New home construction surged following the recession, but has moderated in recent months. That has left many markets with a persistent lack of supply. That's not just true in the for-sale market — the rental vacancy rate is also nearly as low as it's been since the early 1990s.
2. Housing prices
The slow growth of new housing stock has driven up home prices quickly, especially in hot markets like San Francisco and Miami. (Other markets, like Detroit, still haven't regained the value lost during the Great Recession, according to data collected by the Federal Housing Finance Agency.)
3. Existing home sales
Low inventory and high prices have slowed down the entire housing market, which is mostly made up of previously owned homes. Existing-home sales fell for the fourth straight month in July to their lowest level in over two years, the National Association of Realtors reported last week.
4. Foreclosures
Foreclosures plagued the housing market during the financial crisis as borrowers struggled with loans they couldn't afford and homes prices plunged. These days, borrowers are in much better shape, but there are signs that foreclosures are on the rise again. The housing analytics firm Attom Data Solutions found that foreclosure starts are increasing again for the first time since 2015. The trend is particularly visible in hurricane-hit cities like Houston, but also increasingly expensive places like Los Angeles.
