The surge in housing demand in 2020 and 2021 was so substantial that Federal Reserve researchers estimate that housing supply would have needed to increase by a staggering 300% in order to match the pandemic's housing demand surge. This surge was primarily propelled by the shift to remote work and the household formation boom triggered by the separation of roommates seeking greater space. At the peak of the Pandemic Housing Boom, only 546,151 homes were available for sale on Realtor.com in July 2021, a sharp decline from the 1,239,298 homes on the market in July 2019.
That housing demand boom was ultimately subdued by last year's mortgage rate shock, which pushed the average 30-year fixed mortgage rate from a 3 handle to a 7 handle.
