Estate / North America
Real estate signals: policy, demand, supply, and financing conditions. Topic: North-America. Updated briefs and structured summaries from curated sources.
It’s Not Population — It’s Purchasing Power
Full timeline
0.0–300.0
There is currently no shortage of homes for sale, with the highest number of homes on the market in over a decade. The demand for homes is weak due to high prices relative to incomes and credit availability.
- There is currently no shortage of homes for sale, with the highest number of homes on the market in over a decade
- Record levels of new listings are accompanied by falling real prices and rising fall-through rates. This indicates a demand problem rather than a supply shortage
- Demand for homes is not weak because people lack interest. It is weak because homes are too expensive relative to incomes and credit availability
- Population growth is often mistakenly linked to high house prices. However, it is purchasing power that truly influences pricing in the housing market
- For example, 1 million people with an average housing budget of £300,000 will impact the market differently than 100,000 people with a £600,000 budget
- The second group, despite being smaller, has a greater impact on house prices due to their higher purchasing power