IS IT A HOUSING SHORTAGE OR JUST A SHORTAGE OF LISTINGS?

If home inventory is so low, why aren't builders building more? The answer is they are being cautious. Trulia chief economist Jeff Kolko says "Because, despite a supply shortage, the vacancy rate remains elevated, thanks to a glut of unlisted vacant properties, many of them foreclosures.

The market does not have a housing shortage, just a shortage of for-sale listings.

"Many of those vacant, off-market homes could come onto the market, especially if their owners are just waiting for prices to rise enough to make selling worthwhile," Kolko wrote in a blog post.

Also because household formation, which fuels demand, is only half its normal rate.

"The big reason why this is happening is that the share of employed young adults is still closer to recession levels than to normal," Kolko wrote. "In total, we estimate there are 2.4 million "missing households" -people of all ages who should be heading up their own households but are instead living with parents, roommates, or others."