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The U.S. Housing Shortage and Its Impact on You

The U.S. Housing Shortage and Its Impact on You

The U.S. is facing an unprecedented housing shortage. This lower supply of new and existing homes combined with increased demand that started even before the COVID-19 pandemic has served to create a perfect storm in terms of a housing shortage. Prospective buyers need to be aware of the market in their area and the right lenders for their unique needs.
The U.S. is facing an unprecedented housing shortage. According to a report by the Wall Street Journal, there is an average of 276,000 fewer units from 2001 through 2020 as compared with the period between 1968 and 2000.This lower supply of new and existing homes combined with increased demand that started even before the COVID-19 pandemic has served to create a perfect storm in terms of a housing shortage.

Demand in many areas of the country skyrocketed during the pandemic as many families sought to relocate from large cities to suburban areas offering more space. In some areas of the country it was common for homeowners to receive multiple offers well above their asking price.

On the supply side, some builders slowed down their construction of new homes in the spring due to the sharp increase in the cost of lumber and other building materials.

What is the impact on home prices? 

Like anything else, the price of homes is in large part a function of the supply of homes to buy versus the demand for those homes. We have seen homes in short supply in many parts of the country. Coupled with high demand, this has served to pump up home prices to unprecedented levels in many areas of the country.

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Trends during COVID and after 

COVID has produced a perfect storm so to speak of heightened demand, lower supplies of new homes and low interest rates.

Between the stay at home and work from home trends, many families are looking for more space and amid low interest rates, demand for new and existing homes has surged. There are many stories about home sellers receiving multiple offers for thousands of dollars more than their asking price.

A decline in the number of new homes being built due to higher construction costs and other factors has also served to exacerbate this situation.

What will happen once we move out of the COVID era? It’s hard to say. There are indications that interest rates might rise, which would make mortgages more expensive and harder to obtain for some prospective homebuyers.

Impact on first time home buyers 

The impact on many first time home buyers has been especially tough. Many of these first time buyers are younger and may not have the assets to put towards a home that older buyers might have. These older buyers often have the profits on a home they are selling to put towards a new home.

Many younger and first time buyers are finding themselves priced out of the housing market.

Our partners to consider 

While you have no control over housing prices or the supply of available housing units, you do have control over the lender you use to obtain a mortgage. Here are three lenders we suggest that you check out.



Amerisave is a full service lender operating in 49 states and in Washington D.C. For borrowers who have their own personal paperwork in order, Amerisave can provide a quick and relatively easy application process. Amerisave has a number of pros including:

  • You can apply for a loan and submit the required forms online.
  • They offer low rates and low fees.
  • You can obtain a personalized, customized loan rate in about three minutes without having to provide a Social Security number.

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Quicken Loans 

Quicken Loans is America’s largest mortgage lender with over two million loans to families helping them finance their homes. About 98% of the company’s loans originated through the company’s Rocket Mortgage digital platform.

Quicken Loans has several pros, including:

  • They’ve been ranked number one in customer service by JD Power
  • A wide range of loan terms and types
  • An easy online application process

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is a direct lender that utilizes technology to provide an excellent customer experience. The company was founded in 2014 by a number of big-name investors including Goldman Sachs, Citi and American Express. The company has originated over $2 billion in mortgage loans since its inception.

Better offers a number of pros including:

  • An almost totally digital application and approval process
  • Their algorithm reduces their reliance on an applicant’s credit score
  • There are no origination or lender fees


Projections for 2021 and 2022 

There are a variety of projections for the housing market for the rest of 2021 and into 2022. CoreLogic, a data and analytics company, projects that home price gains may slow to around 3% nationally, but some metro areas may see moderate declines. They see demand moderating and the inventory of homes for sale increasing a bit.

There are a number of factors that could play into the direction of home prices including the direction of interest rates, how the delta variant of COVID impacts the economy and a host of other factors.


The U.S. housing market has been on a tear. An historical housing shortage coupled with high demand has served to increase prices dramatically in some markets. Combine this with low interest rates and you have a near perfect storm.

Prospective buyers need to be aware of the market in their area and the right lenders for their unique needs. Finding the right mortgage can make or break their ability to get the home of their dreams.

Check out our low rates on purchase and refinance mortgages. Shopping for the best mortgage deal can pay huge dividends when shopping for a new home.

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Rocket Mortgage

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Veterans United Home Loans

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