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Rising household formation increased market potential by
156,400potential home sales.
The increase in house-buying power boosted market potential by approximately
389,000potential home sales.
Rising house prices increased housing market potential by
174,100potential home sales.
The increase in tenure length reduced housing market potential by
170,200potential home sales.
When considering the right time to buy or sell a home, an important factor in the decision should be the market's overall health, which is lagely a function of supply and demand. Knowing how close the market is to a healthy level of activity can help buyers and sellers determine if it is a good time to buy or sell and what might happen to the market in the future.
"Understanding the factors driving the relationship between supply and demand and the outlook for the housing market is a critical part of the home buying and selling process, and buyers and sellers need a variety of sources to properly inform their housing decisions."
Potential home sales is a measure of the market potential for existing-home sales based on the historical relationship between actual existing-home sales and U.S. population demographic data, homeowner tenure, house-buying power in the U.S. economy, price trends in the U.S. housing market, and conditions in the financial market.
Explore the Data CenterCurrently, potential existing-home sales is nearly
684,000
(SAAR), or 10 percent below the pre-recession peak of market potential.
"Bolstered by record low mortgage rates and demand stemming from millennials aging into their prime home-buying years, the potential for existing-home sales will likely continue to rise. Yet, you can’t buy what’s not for sale. The limited supply of existing homes for sale will continue to be an issue, and it will take builders years at a faster pace to build enough new supply to make up for the imbalance between supply and demand."
Potential home sales are
77%
higher than the market potential low point reached in February 1993.
Potential home sales measures existing-home sales based on the historical relationship between existing-home sales and U.S. population demographic data, homeowner tenure, house-buying power in the U.S. economy, price trends in the U.S. housing market, and conditions in the financial market.
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Follow Mark on FAEconLast post of the year! Thank you to all who follow me. We have made it through 2020. Let’s turn our intentions to 2021! #FirstAmEcon Will the Super-Sellers' Market Continue to Impact Affordability in 2021? https://t.co/nrP8r2YefA
— Mark Fleming (@mflemingecon) December 28, 2020