5 reasons why there ISN’T a housing shortage

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it's impossible to find housing where is the supply very limited supply the housing shortage housing crisis long-term shortage situation over the last 10 years we've had 5.8 million homes that we needed to build that we just haven't built housing is a basic human need but a lack of affordable housing to buy or rent is fueling a housing crisis here in the states research claims that the u.s needed 3.8 million homes in 2019 which grew to 5.2 million homes in 2021 other surveys like this one by the national association of realtors claims that we need 6.8 million homes the construction industry is under intense scrutiny and criticism we're constantly being told to build faster cheaper and in larger quantities traditional construction crews can't keep up with demand while also battling price swings supply chain issues and inflation we're being told to frantically build build and build more we've turned to 3d concrete printing modular construction temporary shelters and more in the hopes of finding a solution desperate families with limited housing options have turned to tiny homes adus or additional dwelling units and in extreme cases homelessness cities like san francisco have become unrecognizable in under a decade during a recent visit to the bay area i was shocked to see every street lined with tents rvs cars missing wheels and makeshift shelters state governments are pouring billions into temporary housing shelters that are doing little to nothing to solve the problem it seems like a new article is released daily about the lack of housing and inventory shortage we are so caught up in blaming the construction industry that we haven't paused to ask if there really is a housing crisis or if the entire situation is artificial an analysis of real housing and population data reveals a very scary trend towards oversupply of housing there are so many parallels between today's landscape and the housing bubble of 2005 and we are doing nothing to stop it in this video we're going to look at five reasons why there isn't a housing shortage in the states first up declining population growth up until the great recession of 2008 the u.s birth rate hovered between 65 and 70 births per thousand women however after 2008 the birth rate never recovered as of 2020 the u.s birth rate was 55.8 births a decline of almost 20 percent from 2007. this can be attributed to lower fertility rates and couples prioritizing career and financial security over children at the same time the number of debts has spiked considerably in 2005 the u.s saw 2.4 million deaths per year that number is now around 3.1 million it is unfortunately expected to increase as the baby boomer generation ages this graph shows the natural increase in population which is births minus deaths as this continues to decline so does international migration while the u.s saw over 1 million immigrants moved to the country in 2016 the number has now dropped to less than 500 000. this significant drop can be due to strict immigration policies processing backlogs and the pandemic according to the u.s census bureau all these factors caused the country's population to grow by fewer than 1 million people in 2021 slower than during the spanish flu pandemic of 1918 and world war 1. in nearly every article about a housing crisis and inventory shortage we're shown this graph on the number of housing permits issued per year it tells us that new construction dropped drastically after the great recession and never fully recovered permits for single-family homes declined from a peak of 1.7 million in 2005 all the way down to 400 000 in 2010 a massive 70 drop even in 2020 the number of permits issued was only 1 million far lower than 2005. however overlaying this graph with the population growth graph tells a very different story the ratio of population growth to new housing permits should be around 1.5 meaning 1.5 people added for every one permit in the mid 2000s right before the last housing crash the population to permitting ratio dipped below 1.5 15 years later we're back in the same danger zone 0.8 people were added in 2020 for every one permit for the first time in u.s history more units were permitted than the population grew this means that we're heading towards oversupply not a shortage the second reason is the number of people per unit when times get tough and there is a true housing shortage people turn to shared housing to help ends meet it's difficult to cut the cost of food transportation and healthcare so cutting the cost of housing by sharing homes and accepting roommates is the first compromise if we were truly facing a housing crisis the number of people per unit in the states would be extremely high between five and eight people per house this is evident in several african and asian countries however the number of people per u.s household is one of the lowest in the world this graph shows that we are at a historic low of just 2.49 people per household the third reason is the number of rental units according to redfin investors purchased a record 64 billion dollars worth of homes in 2021 the most in at least two decades that's an average of 15 percent of homes sold in many metropolitan areas the percentage is much higher in certain cities like washington atlanta charlotte miami jacksonville and phoenix where 25 of homes were bought by investors neighborhoods where a majority of residents are minorities have been heavily targeted according to a washington post analysis of the redfin data minorities usually live in areas that are undervalued or lower priced this makes them more attractive to investors driving up prices for residents here in texas is common knowledge that wealthy out-of-towners and investment firms are buying up any and all available housing at prices above market rate driving out anyone who doesn't have cash up front here's where things get very suspicious coverage of investors buying rental units is very biased and skewed this vox article from june 2021 claims that wall street private equity firms and institutional investors are not to blame for pushing prices upwards jimmy derringer made an excellent youtube video where he uncovered a trail of cash and influence comcast owns vox and nbc the second largest shareholder of comcast is blackrock who also owns time warner disney and news corp they collectively control more than 90 percent of the us media landscape i know i'm approaching conspiratorial territory on this subject matter but this incessant biased news coverage on housing shortage doesn't match the real data the fourth reason is low interest rates over the last 30 years low interest rates have driven up home prices from 2008 up until 2021 the 30-year fixed rate mortgage was below six percent a historic low no money down ultra low interest rates and easy qualification gave individuals the ability to buy much more home for their money it was also cheaper to buy as opposed to rent which created additional demand bukari an author at redfin real estate news says that if we were building enough housing there wouldn't be as much investing activity if we had enough homes to meet this demand everyone would be able to buy a home what this makes absolutely no sense an increase in the supply of homes isn't going to fix a housing shortage if the interest rates stay low investors will continue to buy up property and second homes because there is a profit to be made as we know the fed has been hiking up interest rates to stabilize inflation which has increased the 30-year fixed rate mortgage to over 5.5 percent this will logically increase the supply in homes as we have seen in the past the fifth and final reason is the mismatch of housing types and locations trendy markets like miami denver atlanta and austin have an out of control demand for housing while other places like detroit still have plenty of vacant houses the work from home revolution over the past two years has exacerbated the problem currently someone with a salary from new york can move to denver with that new york salary buy a house and save substantial amount of money companies are slowly catching up to this phenomenon and realizing that they can pay remote workers 30 to 40 less than local workers if and when a recession hits the labor market should normalize and we will see huge changes in pay structures big names in tech like facebook twitter and microsoft have indicated that they will adjust employees pay based on where they live before we move on to the parallels between today's coverage and that of 2005 i'd like to introduce the sponsor of this portion of the video brad hedges is an architectural sales consulting company based in georgia they help designers specify terrazzo stair threads railings pavers and resin wood laminates for architectural applications they specialize in high-end residential and commercial projects like the norfolk southern headquarters in atlanta custom concrete flooring and wall panels by dex industries create a neutral background for their lobby conference rooms and offices head to bradhedges.com to check out their detailed exquisite work and contact them for your next project now back to the video now let's discuss the parallels between today's housing market and that of 2005. back then we were told that the housing market was short millions of houses and that decades of low inventory were to blame sounds familiar after the housing bubble burst we suddenly had a housing surplus shortage of all housing isn't the issue but a lack of affordable housing is millions of homes are tied up as investment property others have mortgages that are in four parents are delinquent many cities have eviction moratorium still in place from two years ago while the numbers show that there isn't an inventory shortage i am glad to see the construction industry innovate automate and try to increase productivity construction is highly reliant on manual labor so it isn't an attractive field for young people skilled workers are aging out and retiring leaving a huge gap in the labor market unfortunately this insane pressure to build build and build more has created fraudulent and deceitful companies that claim to be the solution to homelessness and lack of affordable housing they have raised millions of dollars on an idea and not a viable product as much as i hope that we don't have a crippling recession we need some sort of reset button to weed out all these phony companies let me know what you think about this whole phenomenon in the comments below i'll link my patreon page in the description if you can support me really appreciate it a big thank you to everyone already supporting me i'll link all my sources in the description and on my website too don't forget to hit the like button subscribe button and the notification bell as well thanks for watching see ya
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Channel: Belinda Carr
Views: 134,793
Rating: undefined out of 5
Keywords: architecture, construction, homeless, homelessness in america, homelessness, robotics, housing, housing shortage, affordable housing, scarcity, shortage, diy, millenials, recession, fed, inflation, interest rates
Id: 77g6jRBG1cI
Channel Id: undefined
Length: 11min 44sec (704 seconds)
Published: Thu Jul 07 2022
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