– I keep hearing the housing market in the USA had such a price surge because of demand increase and a lack of housing. Why did happen all of a sudden? There wasn’t some huge increase in people too.

Question

Secondly- What would it take for prices to change?

In: Economics

Answer 1

We need a larger amount of houses as less people are living with parents i.e. kids<18. A boom of millennials hit 30ish and are having kids.

Also we have a perverse scenario where most of the large homes are owned by boomers which makes sense for most assets but is not because this is a more tangible asset.

Also supply responds really slowly. The majority of housing that will exist in 2050 is already here. 2% being built in a year is gangbusters boomtown housing numbers