Motley Fool Money: RE/MAX President and CEO Unpacks Current & Future Residential Real Estate Trends

Housing inventory remains low, yet the reasons behind the shortage continue to evolve in today’s economy.

RE/MAX President and CEO Nick Bailey recently joined an episode of Motley Fool Money, a podcast hosted by financial publication The Motley Fool, to share his thoughts on timely home-buying trends and their long-term effects, including the increasing shift from single-family to multi-family construction.

While inflation and increased interest rates may be affecting the residential housing market, Bailey believes 2022 will still set real estate records.

“We are in an over-ten-year catch up period of a shortage of homes in the U.S.,” says Bailey. “We are short 4.5 million homes, and it’s what’s driving demand. It’s why inventory has been so low… We have the largest household formation happening in the country.”

Bailey, however, suspects that solutions for low inventory may not be necessary forever.

“Over 50% of new construction [in the last three years] has moved from single-family to multi-unit to try to keep up with the demand,” he says. “I think in two years from now, we’re going to see a lot more single-family [construction] start to come out of the ground.”

And while many speculated the millennial generation would experience delays to entering the real estate market, Bailey explained that 43% of homebuyers in 2021 were millennials. He believes that household formation, including significant life changes and family growth, are still driving homebuying – as it always has.

“For the vast majority of [homebuyers], the time to buy is when you’re ready,” explains Bailey. “It’s when you have a job [and] when you have a down payment.”