New home construction has been delayed since the 2007-09 recession, and chickens are now returning to roosts. Builders need to build 3.8 million detached homes just to keep up with existing demand. Shortages are pushing up home prices It threatens to slow down the economy as a whole.
This is the conclusion of an analysis by Freddie Mac Chief Economist Sam Carter. He states that the problem is especially serious for first-time buyers. Despite the fact that 2.38 million lessors became the first homebuyers last year, builders have completed just 65,000 entry-level homes.
“As we overcome the pandemic throughout the year, we anticipate that housing shortages will continue to be one of the biggest obstacles to US comprehensive economic growth.” Carter said In the report. “Simply put, we need to build more single-family entry-level homes to deal with. This shortage, This has a strong impact on the wealth, health and stability of the American community. “
Median home prices reached $ 353,000 in March, up 17% from a year ago. Redfin’s latest housing report — The biggest jump on record.
Not surprisingly, on a scale of 1 to 100, Builder confidence soared According to the National Association of Home Builders / Wells Fargo Housing Market Index, from 30 at the start of the pandemic to 83 in April. Anything over 50 is considered a good market. Builder confidence is highest in the West (92) and lowest in the Midwest (72).
In addition to list shortages and rising prices in many markets, rising mortgage rates are another potential headwind.
Their latest Quarterly forecastFreddie Mac economists predict that 30-year fixed-rate loans will average 3.7% next year from 3.2% this year. New and existing home sales are projected to reach 7.1 million units this year, while Freddie Mac forecasts a decline to 6.7 million units in 2022.
For more information on the shortage of new and existing homes, see Inman’s Inventory Insanity series.
Homebuilders can't keep up with demand
http://feedproxy.google.com/~r/inmannews/~3/Pi7xRLVqo8k/ Homebuilders can't keep up with demand