Rosalind Evans
The housing market faces numerous challenges, but according to Property Brother Drew Scott, “the biggest difference” impacting buyers today is the significant housing shortage. During CNBC’s Your Money event, Drew emphasized the profound effects this scarcity has on the entire market. His brother, Jonathan Scott, echoed this sentiment, highlighting the connection between the housing shortage and broader social issues, stating, “I don’t think people realize this shortage of housing that we have affected everything, from the unhoused problem to the cost of housing.”
Understanding the Housing Shortage
As of mid-2023, the National Association of Realtors reported a staggering shortage of 4 million homes in the U.S. The slow construction of new homes and increased buyer competition have increased prices significantly. In the second quarter of 2024, the median sales price of U.S. homes was $412,300, a decrease from earlier highs but still substantial for many potential buyers. The Fed’s data indicates that the peak price reached $442,600 in the fourth quarter of 2022.
Recent Trends in Home Construction
Despite a slight improvement in housing supply, experts assert that it is insufficient to address the long-standing constraints within the U.S. housing market. According to U.S. Census data, single-family housing starts rose to 1,027,000 in September, marking a 2.7% increase from August. Moreover, with more homeowners ready to sell in the fall, there are signs that the market may be stabilizing.
Long-Term Investment Perspective
While the current housing costs can seem daunting, the Property Brothers remain optimistic about homeownership as a long-term investment. U.S. homeowners with mortgages collectively hold over $17.6 trillion in equity, showcasing the substantial financial benefits of homeownership. “You have to think long-term,” Jonathan advised. “It’s okay if you wait a few years.” This perspective encourages potential buyers to consider creative options, such as teaming up with family members or friends to purchase a home.
Navigating the Current Housing Landscape
The ongoing housing shortage remains a significant hurdle for many prospective homebuyers. However, by adopting a long-term view and exploring innovative purchasing strategies, individuals can still find opportunities within the market. As Jonathan Scott stated, “Give it another 20 years, and no young person will be able to afford to purchase a home, period.” This highlights the urgency of addressing the housing shortage, making it crucial for policymakers and industry leaders to prioritize solutions.
