{"id":7605,"date":"2021-10-06T10:00:53","date_gmt":"2021-10-06T10:00:53","guid":{"rendered":"https:\/\/thezakariagroup.com\/what-do-supply-and-demand-tell-us-about-todays-housing-market\/"},"modified":"2021-10-06T10:00:53","modified_gmt":"2021-10-06T10:00:53","slug":"what-do-supply-and-demand-tell-us-about-todays-housing-market","status":"publish","type":"post","link":"https:\/\/thezakariagroup.com\/what-do-supply-and-demand-tell-us-about-todays-housing-market\/","title":{"rendered":"What Do Supply and Demand Tell Us About Today\u2019s Housing Market?"},"content":{"rendered":"<div>\n<p><img decoding=\"async\" width=\"358\" src=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163859\/20211006-KCM-Share-549x300.jpg\" class=\"webfeedsFeaturedVisual wp-post-image\" alt=\"What Do Supply and Demand Tell Us About Today\u2019s Housing Market? | Simplifying The Market\" loading=\"lazy\" style=\"display: block; margin-bottom: 5px; clear:both;max-width: 100%;\" link_thumbnail=\"\" srcset=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163859\/20211006-KCM-Share-549x300.jpg 549w, https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163859\/20211006-KCM-Share.jpg 750w\" sizes=\"(max-width: 549px) 100vw, 549px\"><\/p>\n<p>There\u2019s a well-known economic theory \u2013 the law of supply and demand \u2013 that explains what\u2019s happening with prices in the current real estate market. Put simply, when demand for an item is high, prices rise. When the supply of the item increases, prices fall. Of course, when demand is <em>very high<\/em> and supply is <em>very low<\/em>, prices can rise <em>significantly<\/em>.<span id=\"more-45273\"><\/span><\/p>\n<p>Understanding the impact both supply and demand have can provide the answers to a few popular questions about today\u2019s housing market:<\/p>\n<ul>\n<li>Why are prices rising?<\/li>\n<li>Where are prices headed?<\/li>\n<li>What does this mean for homebuyers?<\/li>\n<\/ul>\n<h4><strong>Why Are Prices Rising? <\/strong><\/h4>\n<p>According to the latest <a href=\"https:\/\/www.corelogic.com\/intelligence\/u-s-home-price-insights\/\"><em>Home Price Insights<\/em><\/a> report from<em> CoreLogic<\/em>, home prices have risen 18.1% since this time last year. But what\u2019s driving the increase?<\/p>\n<p>Recent buyer and seller activity data from the <a href=\"https:\/\/www.nar.realtor\/research-and-statistics\/research-reports\/realtors-confidence-index\"><em>National Association of Realtors<\/em><\/a> (NAR) helps answer that question. When we take NAR\u2019s buyer activity data and compare it to the seller traffic during the same timeframe, we can see buyer demand continues to outpace seller activity by a wide margin. <strong>In other words, the <em>demand<\/em> for homes is significantly greater than the current <em>supply<\/em> that\u2019s available to buy<\/strong> <em>(see maps below)<\/em>:<a href=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163900\/20211006-MEM-Eng-1.png\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-45275\" src=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163900\/20211006-MEM-Eng-1.png\" alt=\"What Do Supply and Demand Tell Us About Today\u2019s Housing Market? | Simplifying The Market\" width=\"650\" height=\"366\" srcset=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163900\/20211006-MEM-Eng-1.png 1000w, https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163900\/20211006-MEM-Eng-1-533x300.png 533w\" sizes=\"(max-width: 650px) 100vw, 650px\"><\/a>This combination of low supply and high demand is what\u2019s driving home prices up. Bill McBride, author of the <a href=\"https:\/\/calculatedrisk.substack.com\/p\/house-price-to-median-income\"><em>Calculated Risk<\/em><\/a> blog, puts it best, saying:<\/p>\n<blockquote>\n<p><em>\u201cBy some measures, house prices seem high, but the recent <strong>price increases make sense from a supply and demand perspective.<\/strong>\u201d<\/em><\/p>\n<\/blockquote>\n<h4><strong>Where Are Prices Headed?<\/strong><\/h4>\n<p>The supply of homes for sale will greatly affect where prices head over the coming months. Many experts forecast prices will continue to increase, but they\u2019ll likely appreciate at a slower rate.<\/p>\n<p>Buyers hoping to purchase the home of their dreams may see this as <a href=\"https:\/\/www.simplifyingthemarket.com\/2021\/09\/17\/have-you-ever-seen-a-housing-market-like-this-infographic\/\">welcome news<\/a>. In this case, perspective is important: a slight moderation of home prices does not mean prices will depreciate or fall. <strong>Price increases may occur at a slower pace, but experts still expect them to rise.<\/strong><\/p>\n<p>Five major entities that closely follow the real estate market forecast home prices will continue appreciating through 2022 <em>(see graph below)<\/em>:<a href=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163902\/20211006-MEM-Eng-2.png\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-45276\" src=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163902\/20211006-MEM-Eng-2.png\" alt=\"What Do Supply and Demand Tell Us About Today\u2019s Housing Market? | Simplifying The Market\" width=\"650\" height=\"488\" srcset=\"https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163902\/20211006-MEM-Eng-2.png 1000w, https:\/\/files.simplifyingthemarket.com\/wp-content\/uploads\/2021\/10\/04163902\/20211006-MEM-Eng-2-400x300.png 400w\" sizes=\"(max-width: 650px) 100vw, 650px\"><\/a><\/p>\n<h4><strong>What Does This Mean for Homebuyers? <\/strong><\/h4>\n<p>If you\u2019re <a href=\"https:\/\/www.simplifyingthemarket.com\/2021\/09\/23\/two-reasons-why-waiting-a-year-to-buy-could-cost-you\/\">waiting<\/a> to enter the market because you\u2019re expecting prices to drop, you may end up paying more in the long run. Even if price increases occur at a slower rate next year, prices are still projected to rise. That means the home of your dreams will likely cost even more in 2022.<\/p>\n<h3><strong>Bottom Line<\/strong><\/h3>\n<p>The truth is, high demand and low supply are what\u2019s driving up home prices in today\u2019s housing market. And while prices may increase at a slower pace in the coming months, experts still expect them to rise. If you\u2019re a potential homebuyer, let\u2019s connect today to discuss what that could mean for you if you wait even longer to buy.<\/p>\n<\/div>\n<p class=\"wpematico_credit\"><small>Powered by <a href=\"http:\/\/www.wpematico.com\" target=\"_blank\" rel=\"noopener\">WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There\u2019s a well-known economic theory \u2013 the law of supply and demand \u2013 that explains what\u2019s happening with prices in the current real estate market. Put simply, when demand for an item is high, prices rise. When the supply of the item increases, prices fall. Of course, when demand is very high and supply is [&hellip;]<\/p>\n","protected":false},"author":101010,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[98,99,102,101,108],"tags":[],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Do Supply and Demand Tell Us About Today\u2019s Housing Market? - The Zakaria Group<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/thezakariagroup.com\/what-do-supply-and-demand-tell-us-about-todays-housing-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Do Supply and Demand Tell Us About Today\u2019s Housing Market? - The Zakaria Group\" \/>\n<meta property=\"og:description\" content=\"There\u2019s a well-known economic theory \u2013 the law of supply and demand \u2013 that explains what\u2019s happening with prices in the current real estate market. 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