underbuilding

Homebuyers have had to contend with a shrinking pool of homes for sale for much of the last decade, partly due to underbuilding of new homes since the mid-2000s housing crash and years of ultra-low mortgage rates, which give homeowners less incentive to sell after years of soaring home prices.

And the prospects for a bigger spike in supply are slim, given that new construction hasn’t kept up pace with demand after years of underbuilding following the housing crash in 2008.

“Over the last four or five years, every place I go, they cite underbuilding,” he said.

Exacerbating all of these challenges, there has been underbuilding in the U.S. for years, particularly in expensive coastal metros where housing is in high demand.

The Zillow economists say the market forces that have given sellers the upper hand over the past two years or so — tight supply after years of underbuilding, and elevated demand because of remote work, U.S. demographics and low mortgage rates — will persist this year.