Basically, it seems that investors are being unfairly blamed for a shortage in housing supply. While investors make up a good chunk of the demand, the lack of supply can be explained by at least two other factors.
One, many homeowners cannot afford to sell their homes, because they owe more than what their homes are worth or lack sufficient equity in their home to "trade up." According to Zillow, 44% of homeowners with a mortgage cannot afford to sell their homes.
Two, there has been little new home construction in years. Homebuilders need time to ramp up construction to meet resurgent demand for homes. Amid rising land and construction costs, new homes that have been built are targeted at the top end of the market, allowing builders to maintain their margins.
As a result, there are few small and inexpensive homes that are typically sought by first-time homebuyers.-- Written by Shanthi Bharatwaj New York. >Contact by Email. Follow @shavenk