A housing shortage will likely be one more effect of the housing bubble, despite the housing market crash, foreclosure epidemic, massive unemployment and all the other hardships fade. When the U.S housing market crashed, banks stopped home lending, home buyers stopped purchasing and home builders stopped building. Many banks have not allowed apartment construction even. Even with an emerging shadow market of foreclosures, a housing shortage in 2011 is forecast when a growing population exceeds accessible shelter.Resource for this article: Credit crisis will cause a housing shortage as economy recovers By Personal Money StoreHousing shorted appears to be masked by market crashA housing shortage in 2011 could happen as the economy recovers and the desire to create new households returns. It was reported by CNNMoney.com the nation is not building enough homes to keep up with potential demand. Just 672,000 new homes were started in April, which is less than half the long-term rate that will be needed to meet population growth within the U.S. The housing shortage, which may already exist, has been masked by the housing market crash. When job generation returns, so will the property buyers. Pent-up demand might just catch the U.S. housing market off guard, leading to a housing shortage and rising home prices.Housing inventory won't keep upA housing shortage seems like it is very unlikely as the U.S. housing market has been preoccupied with foreclosures and excess inventory. But it was reported by Forbes.com that if The United States can't regain its focus on building homes, the housing market could have a much bigger problem. Brian Wesbury, chief economist at First Trust Advisors, explained to Forbes that 1.5 million houses a year have to be built to keep up with population growth. Current inventory of homes is enough to accommodate the housing market for about 7 months.Seems like the credit crisis has handcuffed the homebuildersThe upcoming housing shortage will be boosted by the credit crisis. It was reported by the Los Angeles Times that home buyers aren't the only ones who have to deal with tight-fisted banks. Builders are having a hard time borrowing the money they need to purchase any kind of land, develop some lots and construct houses. Most builders have decided not to start houses today until they either have nothing else to sell or buyers have an approved mortgage application in hand. A builder is a lot more likely to get credit now with a solid contract from someone who has a mortgage and doesn't have an additional house to sell.Rental market shortage even worseThe housing shortage of 2011 is expected to hit the apartment rental market even harder. As reported by the National Association of Home Builders, new multifamily construction has been crippled by the credit crisis. That leaves the industry unable to meet the increased need for market-rate and affordable apartments that is expected to accompany economic recovery beginning next year. The two- to three-year timeline required to build apartment communities won't be quite enough time for a large number of Generation Y professionals and newly formed households expected to need them.Now you need to lock in low rentA higher rent could be led to by the apartment shortage. Mai Ling Slaughter at MSN.com says that the current market is on the renter's side for the moment, with many vacancies at a 30-year high and plenty of perks available for both current and new tenants, but it could all come to an end soon. Now is the time to sign an 18 to 24 month lease contract.
CitationsCNN Money.commoney.cnn.com/2010/06/15/real_estate/new_housing_bubble/?npt=NP1Forbes.comrealestate.msn.com/article.aspx?cp-documentid=23505825Los Angeles timeslatimes.com/business/realestate/la-fi-lew-20100613,,7268736.story