Google+
  • Ocwen3.67+0.17 +4.86%
  • Zillow34.65-1.31 -3.64%
  • Trulia47+0 +0%
  • NationStar14.81+0.48 +3.35%
  • CoreLogic39.22-0.27 -0.68%
  • RE/MAX43.78+0.37 +0.85%
  • Fannie Mae1.69-0.03 -1.74%
  • Freddie Mac1.57-0.03 -1.87%
  • Wells Fargo44.28-0.09 -0.20%
  • CitiMortgage47.23+1.43 +3.12%
  • Bank of America15.65+0.49 +3.23%
  • Fidelity National Financial36.91+0.06 +0.16%
  • First American39.28-0.18 -0.46%
  • AUDUSD=X0.7653+0.0021 +0.2778%
  • USDJPY=X101.3200+0.2330 +0.2305%
  • WP Stock Ticker
Home | Commentary | Ask the Economist: Existing-Home Shortage Has a ‘Domino Effect’ on the Market
Print This Post Print This Post

Ask the Economist: Existing-Home Shortage Has a ‘Domino Effect’ on the Market

Ask the Economist
David Crowe cropped

David Crowe

David Crowe is the Chief Economist and SVP with the National Association of Home Builders (NAHB). Dr. Crowe is responsible for NAHB’s forecasts of housing and economic trends, survey research and analysis of the home building industry and consumer preferences as well as microeconomic analysis of government policies that affect housing. Dr. Crowe is also responsible for the development and implementation of an innovative model which has estimated the net economic impact of new home construction in over 600 markets. Past research has concentrated on home ownership trends, tax issues, demographics, government mortgage insurance and local land-use ordinance impacts. Before becoming NAHB Chief Economist, Dr. Crowe was NAHB Senior Vice President for Regulatory and Housing Policy. Prior to NAHB, Dr. Crowe was Deputy Director of the Division of Housing and Demographic Analysis at HUD.

In January 2016, NAHB announced that Dr. Crowe will be retiring effective March 18, 2016, after 27 years as the association’s Chief Economist.

When you look back on your career, what are you most proud of having accomplished?

I continued to give the homebuilding industry the best possible information on the status of the housing market and the economy during the worst decline in housing since the Great Depression. NAHB as a whole, and I’ve been a part of that, has been diligent about providing accurate information even when it was information that the industry and individual builders didn’t want to hear.

Did they appreciate it even if it was information they didn’t want to hear?

Yes, they did. They were bright enough, smart enough, and pragmatic enough to understand they needed the bad news along with the slowly evolving good news.

What is your take on the housing inventory situation?

I don’t believe there is a shortage of new housing inventory. There is a shortage of existing housing on the market, and that’s the trickle effect. If there is a shortage of existing homes, that’s where brand new homebuyers come from—selling existing homes. If the existing homeowners are unwilling to sell for a variety of reasons, then they basically are not released to buy the new homes. The new home market is waiting on existing homeowners selling their current home to build more new homes.

It’s a domino effect—some existing homeowners can’t sell because they don’t have enough equity in their home to come out with a sufficient downpayment. Some of them no longer have the credit rating to get a mortgage. So there are some other reasons. But those that are just plain reluctant are often reluctant because they realize that if they want to buy an existing home, their options are relatively narrow. So it’s feeding on that reluctance that is continuing to keep the inventory low.

Many sellers may not have an absolute decision as to whether to buy an existing home or a new home. So the low inventory of existing homes is locking them in place, even though if they were to decide they wanted a new home, they probably would have a greater opportunity or greater selection from the inventory of new homes.

Is there a lack of demand for new homes?

There is a lack of demand for new homes for two reasons: Number one, very slim participation by first-time homebuyers. They don’t have to worry about selling a home, so they can move directly into a home without that concern about selling. But many first-time homebuyers are relatively young, so they suffer from the conditions that the millennials suffer from: Poor income growth, difficulty in getting a mortgage partly due to student debt and partly due to rigid standards, and their own preference for being footloose.

So number one, we don’t have a lot of buyers coming in from the first-time side because of those reasons. Number two, we have a reduced amount of buyers from existing homeowners becauser of this fear of rollover as well as similar financial issues such as insufficient credit or insufficient equity.

What in your opinion needs to happen in order for the housing market to be completely normal?

The rigid and inflexible mortgage underwriting standards that we’ve created need some flexibility. Policymakers went overboard in correcting the mistakes of the boom, and people are being excluded from mortgages that would make good credit risks. That’s number one.

Number two is the generally expanding economy. We’re getting that—it IS coming, but we have to continue to see the economy expand so people can feel secure in their jobs and therefore comfortable in making a major purchase like a house.

The third thing is on the supply side. We need more workers in the construction industry. Not having enough workers has slowed delivery. I think it’s still possible to build houses if there is a demand, but it takes longer to complete them.

After your retirement, how closely will you follow the housing market? Are you still going to keep up with it pretty regularly?

Yes. You can’t divorce yourself from it that quickly. It’s a habit, and I’ll keep it. It’s a fascinating industry, and I’ll continue to follow it.

About Author: Brian Honea

Brian Honea
Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

87 comments

  1. Pingback: Ask the Economist: Existing-Home Shortage Has a ‘Domino Effect’ on the Market - Brokers TitleBrokers Title

  2. Pingback: Can I Buy A Home With Bad Credit And Foreclosure | Short Sale Houses

  3. Pingback: Lack of Inventory Challenging Many Housing Markets | Keeping Current Matters

  4. Pingback: Lack of Inventory Challenging Many Housing Markets - Mike Smalley Mortgage Team - Mortgage Advisor

  5. Pingback: Lack of Inventory Challenging Many Housing Markets – Use A Pro™

  6. Pingback: Lack of Inventory Challenging Many Housing Markets - Heldoorn Group

  7. Pingback: Lack of Inventory Challenging Many Housing Markets - Move My World Relocation

  8. Pingback: Lack of Inventory Challenging Many Housing Markets – Carolyn Clark – REALTOR®

  9. Pingback: Lack of Inventory Challenging Many Housing Markets - Des Moines Real Estate Blog

  10. Pingback: Lack of Inventory Challenging Many Housing Markets |

  11. Pingback: Lack of Inventory Challenging Many Housing Markets | Pam Zentner, Metro Atlanta REALTOR

  12. Pingback: Lack of Inventory Challenging Many Housing Markets – A WordPress Site

  13. Pingback: Lack of Inventory Challenging Many Housing Markets | Mortgage Geek | Jason R. Richardson

  14. Pingback: Lack of Inventory Challenging Many Housing Markets – BetterOptions For Home Sellers | Angelie Karako

  15. Pingback: Lack of Inventory Challenging Many Housing Markets | Tampa & New Tampa Real Estate :: Keller Williams

  16. Pingback: Lack of Inventory Challenging Many Housing Markets | Greater Raleigh Real Estate :: Goldens Group

  17. Pingback: Lack of Inventory Challenging Many Housing Markets

  18. Pingback: Lack of Inventory Challenging Many Housing Markets | Jay Mathison's Chicagoland Real Estate Blog

  19. Pingback: Lack of Inventory Challenging Many Housing Markets | Jeff Duneske's Blog

  20. Pingback: Lack of Inventory Challenging Many Housing Markets | Christy Hartwick

  21. Pingback: Lack of Inventory Challenging Many Westchester County Housing Markets

  22. Pingback: Lack of Inventory Challenging Many Housing Markets -

  23. Pingback: Lack of Inventory Challenging Many Housing Markets | Ann Motz | Real Estate Agent | DeSoto County MS Homes For Sale

  24. Pingback: Jupiter Florida Real Estate - Lack of Inventory Challenging Many Housing Markets - Jupiter Florida Real Estate

  25. Pingback: Lack of Inventory Challenging Many Housing Markets – Landmark Premier Properties

  26. Pingback: Lack of Inventory Challenging Many Housing Markets | Reno Real Estate News

  27. Pingback: Lack of Inventory Challenging Many Housing Markets - WEKNOWMEMPHISWEKNOWMEMPHIS

  28. Pingback: Lack of Inventory Challenging Many Housing Markets - Ann Melendez

  29. Pingback: Lack of Inventory Challenging Many Housing Markets | Virginia Beach VA Real Estate

  30. Pingback: Lack of Inventory Challenging Many Housing Markets | WestSound Live!

  31. Pingback: Lack of Inventory Challenging Many Housing Markets — HOMEFRONT Realty

  32. Pingback: Lack of Inventory Challenging Many Housing Markets | REMAX Premier Realty in Irvine – Kinney Yong

  33. Pingback: Lack of Inventory Challenging Many Housing Markets | Marseille Homes in Visalia | The Anderson Real Estate Group

  34. Pingback: Lack of Inventory Challenging Many Housing Markets | Visalia Homes For Sale | The Anderson Real Estate Group

  35. Pingback: Lack of Inventory Challenging Many Housing Markets | Avalon Homes In Visalia | The Anderson Real Estate Group

  36. Pingback: Lack of Inventory Challenging Many Housing Markets | Homes in Visalia For Sale | The Anderson Real Estate Group

  37. Pingback: Lack of Inventory Challenging Many Housing Markets | KimCanSell- North Texas Real Estate

  38. Pingback: Lack of Inventory Challenging Many Housing Markets | Sumner, Robertson County TN Real Estate

  39. Pingback: CWalshRealty.com | Guiding You Home » Blog Archive » Lack of Inventory Challenging Many Housing Markets

  40. Pingback: Lack of Inventory Challenging Many Housing Markets - Seth Muenzer | Pierce Real Estate

  41. Pingback: Lack of Inventory Challenging Many Housing Markets | Assurance Home Loans

  42. Pingback: Lack of Inventory Challenging Many Housing Markets | Providence Group Realty Newswire

  43. Pingback: Treece Team - Lack of Inventory Challenging Many Housing Markets

  44. Pingback: Lack of Inventory Challenging Many Housing Markets - Blogging By Charles

  45. Pingback: Tight Supply Is Driving This Market | Your East Bay REALTOR

  46. Pingback: Lack of Inventory Challenging Many Housing Markets | New Visalia Homes For Sale | The Anderson Real Estate Group

  47. Pingback: Lack of Inventory Challenging Many Housing Markets | Anderson Real Estate Group

  48. Pingback: Lack of Inventory Challenging Many Housing Markets | Antonio Bolastig Real Estate Blog

  49. Pingback: Lack of Inventory Challenging Many Housing Markets - Charlottesville Real Estate Blog

  50. Pingback: Lack of Inventory Challenging Many Housing Markets | Marshfield Real Estate

  51. Pingback: Lack of Inventory Challenging Many Housing Markets | Shore Real Estate Search

  52. Pingback: Why Can’t I Find a House? |

  53. Pingback: Lack of Inventory Challenging Many Housing Markets | Wasatch Front Real Estate :: Select Group Utah

  54. Pingback: Lack of Inventory Challenging Many Housing Markets - McDermott & McDermott RE, Inc

  55. Pingback: Atlanta Luxury Homes Realtor – Lack of Inventory Challenging Many Housing Markets

  56. Pingback: Lack of Inventory Challenging Many Housing Markets 03-21-2016 - Homes for Sale Lancaster, Ca

  57. Pingback: Lack of Inventory Challenging Many Housing Markets 03-21-2016 - Homes for Sale Antelope Valley, Ca

  58. Pingback: Lack of Inventory Challenging Many Housing Markets 03-21-2016 - Homes for Sale Antelope Valley, California

  59. Pingback: Lack of Inventory Challenging Many Housing Markets 03-21-2016 - Homes for Sale Antelope Valley, Tehachapi, CA

  60. Pingback: Lack of Inventory Challenging Many Housing Markets 03-21-2016 - Realtor Terri Gold

  61. Pingback: Lack of Inventory Challenging Many Housing Markets | Anthony Real Estate|escondido homes for sale|escondido real estate

  62. Pingback: Hollie D. Kelley

  63. Pingback: Lack of Inventory Challenging Many Housing Markets | Mark Williams

  64. Pingback: Lack of Inventory Challenging Many Housing Markets | Brin Collins

  65. Pingback: Lack of Inventory Challenging Many Housing Markets - South Bay Real Estate by Gerry

  66. Pingback: Lack of Inventory Challenging Many Housing Markets | Southern New England Real Estate :: Anytime Realty

  67. Pingback: Lack of Inventory Challenging Many Housing Markets - Home 2 Home Real Estate Services

  68. Pingback: Lack of Inventory Challenging Many Housing Markets - Team Ruppert

  69. Pingback: Lack of Inventory Challenging Many Housing Markets - Team Ruppert

  70. Pingback: Lack of Inventory Challenging Many Housing Markets | Kopf Group Realtors

  71. Pingback: Thinking of Selling? The Market Needs Your Listing!! | Providence Group Realty Newswire

  72. Pingback: Thinking of Selling? The Market Needs Your Listing!! - Mike Smalley Mortgage Team - Mortgage Advisor

  73. Pingback: Thinking of Selling? The Market Needs Your Listing!! - Parker Kennedy Realty

  74. Pingback: Thinking of Selling? The Market Needs Your Listing!! | Christy Hartwick

  75. Pingback: Thinking of Selling? The Market Needs Your Listing!! | Reno Real Estate News

  76. Pingback: Thinking of Selling? The Market Needs Your Listing!!

  77. Pingback: Thinking of Selling? The Market Needs Your Listing!! | Anthony Real Estate|escondido homes for sale|escondido real estate

  78. Pingback: Thinking of Selling? The Market Needs Your Listing!! | Chardonnay Homes In Visalia | The Anderson Real Estate Group

  79. Pingback: Considering Selling? The Market NEEDS Your Listing. NOW!

  80. Pingback: Treece Team - Thinking of Selling? The Market Needs Your Listing!!

  81. Pingback: Thinking of Selling? The Market Needs Your Listing!! - Greenville's Real Estate Blog

  82. Pingback: Thinking of Selling? The Market Needs Your Listing!! | LifeInLakewoodRealtor

  83. Pingback: Lack of Inventory Challenging Many Housing Markets | San Antonio Area Real Estate :: Handy Realty SA

  84. Pingback: Thinking of Selling? The Market Needs Your Listing!! - Leslie Horne & Associates - Keller Williams RealtyLeslie Horne & Associates – Keller Williams Realty

  85. Pingback: Lack of Inventory Challenging Many Housing Markets - Homes for Sale Lancaster, Ca

  86. Pingback: Lack of Inventory Challenging Many Housing Markets - Homes for Sale Antelope Valley, CA

  87. Pingback: Thinking of Selling? The Market Needs Your Listing!! - ReynoldHomes

Leave a Reply

Scroll To Top