The housing market, while slowly recovering from the economic impacts of the COVID-19 pandemic, is still in a state of transition and housing sales across the US is expected to remain subdued for the remainder of the year. Despite some stabilization of the market, experts are forecasting sales to remain below pre-pandemic levels.

The current situation with low levels of housing supply has drove home prices up, which has been one factor limiting the recovery of home sales. With the shortage of inventory and lack of available affordable homes, housing affordability has become a major issue for many Americans. One of the leading contributors to the limited inventory has been the restricted availability of construction materials such as lumber, delaying the production of new homes.

In an effort to both ensure the stabilization of the housing market and move towards recovery by increasing housing affordability, both at state and federally levels, things are starting to take shape. According to the National Association of Homebuilders, the US Department of Housing and Urban Development’s Decision to reduce mortgage insurance premiums is expected to have a positive effect on housing affordability and result in an increase in home sales.

Fannie Mae’s recent Economic and Strategic Outlook report had also projected a steady improvement in housing market activity in the second half of 2021 as the economic outlook improves. Despite this, the organization maintains it’s stance to anticipate home purchase activity to stay below pre-pandemic levels for remainder of the year. With all factors considered, the recovery of the housing market is expected to take some time.

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