Winter 2021 Guide to House Prices

House prices are determined by housing supply, housing demand, and housing affordability.


Housing supply measures how many months it would take to sell all the houses currently listed for sale, at the current pace of home sales. For example, if there are 600 homes currently listed for sale, and an average of 100 homes are selling each month, there would be a 6-month housing supply. This is because it would take 6 months to sell all the homes currently listed for sale. A buyer’s market is anything more than 6 months. A seller’s market is anything less than 6 months. In this case, sellers would have greater negotiating power, and buyers may have to bid higher than the list price in order to compete with multiple offers.

Before the pandemic, the housing supply was running around 6 months or so on a national level, which means that buyers were starting to have more negotiating power. However, since the pandemic, the housing supply plunged. This was due to the fact that many homeowners put off their decisions to sell, but buyer demand remained very strong, particularly among first-time homebuyers.

Even so, it’s not accurate to make generalizations about housing supply, it tends to be low in the lower price ranges and higher in the higher price ranges. So this metric really depends on your specific neighborhood or price range.


One way to measure housing demand is by looking at the strength of the jobs market. That’s because when people have jobs, they tend to be confident about making large purchases like cars and houses. This chart illustrates the Job Openings and Labor Turnover (JOLTs) report. It’s published monthly and it measures the total job openings in the US. This report is closely watched by the Federal Reserve to determine whether there is job growth in the economy. Many economists feel this report is more useful than the unemployment rate report because the unemployment report doesn’t count the people who have stopped looking for jobs. This report, however, looks at it from the employer’s perspective and counts the total job openings in the economy… the higher the number, the stronger the economy.

As you can see, job openings decline significantly once the pandemic hit due to many businesses shutting down. However, the numbers recovered shortly thereafter. The only question is, where do we go from here? The answer to that question really depends on what happens in the economy over the next several months.


Record-low interest rates are causing mortgage payments to be, in most cases, more affordable than rent payments. The biggest challenge to housing affordability is actually the buyer’s down payment funds or lack thereof. Potential solutions for some buyers to consider could include the use of gift funds from relatives for a down payment, and/or the use of a low down-payment program. Of course, housing affordability in your situation could be higher or lower depending on the amount of your down payment and the mortgage strategy you choose.

Conclusion: We anticipate stable house prices over the next several months because housing supply is likely to remain relatively low, housing demand is likely to remain relatively strong, and buying a house is likely to remain affordable vs. renting for many buyers. Please contact us for specific information on housing supply, housing demand, and housing affordability in your local market. 

About the author

ALG Mortgage was founded by a team of local entrepreneurs with deep roots in the mortgage, real estate, banking, public accounting, and digital marketing industries. As an expert independent mortgage agency, we are not tied to any one lender in the industry, allowing us to truly act as partners for the clients we serve, and ensure they end up in the absolute best option for their own personal situation.