The housing crunch featuring low supply and spiking demand is causing a wide range of emotion for potential buyers, sellers and builders.
It’s a collision of factors that has added some $20,000 or more to a home’s value.
The winners – besides the sellers who are finding surprising added value – include the home-building industry.
“This is the best housing market I’ve seen in my career,” KB Homes CEO Jeffrey Mezger told CNN Business. “It’s a good time to be a homebuilder.”
The scarcity of homes can be traced to the housing bubble crisis of more than a decade ago. Construction was virtually halted and the slow build-back has not yet made up for the crash.
“We’ve been under-building for the last 15 years,” said Mezger.
Americans saw a record-low selection as this month began, which led to fewer sales overall.
The National Association of Realtors reported the number of homes on the market at only 1.03 million – at no time since the NAR began collecting that data in 1982 has the number been this low.
Existing home sales fell by almost 7% between February and March, according to the NAR.
Another sign of trouble is that mortgage rates are reversing their extended stay at very low levels. Rates on a 30-year fixed-rate mortgage hit 3.09% last week, the highest since June.
And lumber shortages have become a factor, with the National Association of Home Builders saying in February that rising material costs are adding $24,000 to the listing price.
And people are still paying the premium.
“We’ve been able to raise price enough to cover the cost and raise our margin,” KB Homes’ Mezger told CNN. “Demand is that strong.”
A home’s average stay on the market in February hit a record low — 20 days.