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Housing demand is drastically outpacing supply

27 July 2021
Dan Ackermann
Date: Census Bureau; Chart: Axios Visuals

Prospective homeowners are so eager to buy that many are closing on new homes that aren’t even close to move-in ready.

Why it matters:Low mortgage rates and the desire for more space have fueled a housing boom where demand has far outstripped supply.

  • In turn, prices surged, making homes more unaffordable to increasingly frustrated consumers.
  • However, many of the buyers who remain in the market seem to be getting more aggressive as an increasing share of new home buyers aren’t waiting for construction to be completed before they sign.

By the numbers: In June, 76.6% of the new homes sold were either still under construction or not yet started. This is considerably higher than the 65% level where the metric trended before the pandemic.

  • For impatient buyers, this may continue to be the best option in the near term based on the inventory.
  • While the supply of new homes for sale actually increased to 6.3 months' worth in June — the highest level since April 2020 — completed homes represented a record low 10.2% of this supply.

What they’re saying: “In recent months, many homebuilders have resorted to intentionally slowing the pace of new sales to allow production to catch up,” Ivy Zelman, CEO of housing research firm Zelman & Associates, tells Axios.

  • “Speculative homes are being started and will not be released for sale until later on in the construction process given the inflated cost risk, or in some cases upon completion. This should change the supply-demand landscape, as more inventory gets released for sale."

What to watch: In addition to the new home sales reports, monthly updates on homebuilder confidence from the NAHB and new residential construction from the Census Bureau will provide the earliest signals on if and when new home supplies improve materially.

  • “There are signs that this low inventory/tight housing market could be ending or softening soon,” UBS senior U.S. economist Pablo Villanueva tells Axios. “Inventory of new homes for sale is rising, demand is softening, labor market is loosening, and supply chain disruptions probably peaked in Q2.”

The bottom line: While new home sales are well off of their highs, the underlying details suggest there is nevertheless a sense of urgency among those who have the capacity to buy.

Transcripts show George Floyd told police "I can't breathe" over 20 times

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Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.

Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.

The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.

  • The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.

What the transcripts say:

  • Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
  • The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
  • Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."

Read the transcripts via DocumentCloud.