The low interest rates for mortgages in 2020 and 2021 were another foremost contributing factor to the current shortage. As loans became more affordable, many buyers were quick to jump into the investment. In December 2020, Freddie Mac reported a record low average for 30-year mortgage rates at only 2.68%.
These lower-than-average interest rates didn’t just attract average homebuyers. Private and institutional investors bought up a lot of the available inventory at the time. The subsequent rush of buyers – along with heightened market prices – in turn sent sellers into a frenzy. The result was increased competition for far too few homes. Check out the accompanying resource from New City Moving for further information.
Graphic created by New City Moving, a long distance moving company.