underbuilding

The housing price surge was really the product of two global crises: underbuilding after the 2008 mortgage crash, and unusual moving patterns caused by COVID-19.

Homebuyers have had to contend with a shrinking pool of homes for sale for much of the last decade, partly due to underbuilding of new homes since the mid-2000s housing crash and years of ultra-low mortgage rates, which give homeowners less incentive to sell after years of soaring home prices.

And the prospects for a bigger spike in supply are slim, given that new construction hasn’t kept up pace with demand after years of underbuilding following the housing crash in 2008.

“Over the last four or five years, every place I go, they cite underbuilding,” he said.

Exacerbating all of these challenges, there has been underbuilding in the U.S. for years, particularly in expensive coastal metros where housing is in high demand.