The Housing Shortage — What to Expect in 2019 and Beyond

According to a recent report from Freddie Mac, the number of new houses being in the United States this year is about 370,000 homes short of the level required for long-term housing demand. That means there are more homebuyers than houses, which is good and bad. While this may make finding a buyer easier right now, in the long run, this shortage is driving up the cost of homes in a way that may make owning a home more difficult for younger families.


While there are some short-term benefits to the shortage for those selling on the market today, here are some long-term impacts and projections that impact how people may buy and sell homes in the future.

Home Appreciation to Slow in 2019

There are a lot of factors that drive positive home equity, and housing supply is certainly one of them. If there’s high demand for homes and not too many on the market, your house becomes a valuable commodity. Even with the housing shortage contributing to the increased value of homes, this appreciation is still expected to slow down a bit in 2019. Homes will still gain value, but as new construction tries to adjust to market demands, individual improvements may be a more reliable way to increase home equity next year.

Young Families May Rent Longer

If there’s no catch-up in the supply of new entry-level houses, younger families will be forced to rent longer. That can mean fewer buyers in the long run, especially if affordable homes aren’t available near the spots where new jobs are being made. The lack of new construction also means that rent will be more expensive, so it is possible that entry-level dwelling will be hard to find overall.

Homes May Get Harder to Sell

It’s easier to sell homes right now, but if appreciation continues to grow faster than wages, finding a buyer may become more difficult in the next five to ten years. New demand for homes tends to come from the bottom-up, so if the prices for houses start to high, it is going to be harder for new buyers to enter the market. Eventually, the limited number of buyers could make selling more difficult. When buyers become even more scarce, current homeowners who are looking to sell a house may be forced settle for less money than the market value.

There Will Be New Ways to Buy Homes

Even with the challenges of a home shortage, people still need to find homes. With that need comes ways for creative entrepreneurs to fill the gap. There are already some “lease to own” services and apps like Home Partners of America entering the market that aim to help renters transition into an affordable mortgage.

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