No improvement for home builders and yet, the pandemic housing market MARCHES ON!
Home builders have been hit exceptionally hard the last 2 years and there doesn’t appear to have a light at the end of the tunnel.
“Higher material costs and lack of availability are adding weeks to typical single-family construction times,” said NAHB Chairman Chuck Fowke. “NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19% since December 2020. Policymakers need to take action to fix supply chains. Obtaining a new softwood lumber agreement with Canada and reducing tariffs is an excellent place to start.”
Let’s break it down…..
- The Wood. Oh, the cost of wood.
- Lumber prices, on average, have caused an increase of $30,000 per single family residence
- Supply chain back up!
- Restrictions
- Tariffs and…..
- They NEED PEOPLE! Everyone is hiring.
And in this market, ONE would think, something has to give, right? Or does it?
We are now two years into the housing-pandemic frenzy and we still don’t see a slow down in sight.
- Bidding wars continue
- Builders can’t get supplies (see above)
- The median house price is up 20% from last year!
- Inventory is at an ALL-TIME low
- Real Estate agents are at an ALL-TIME high
What it all comes down to, I couldn’t have said it better myself:
“It’s not a bubble, it really is about the fundamentals,” said Jenny Schuetz, a housing researcher at the Brookings Institution. “It really is about supply and demand — not enough houses, and huge numbers of people wanting homes.”
In 2021, more than six million existing homes sold, the highest number since 2006. That still fell short of the demand nationally, and according the National Association of Realtors, there is little evidence to suggest the nation is in a hurry to correct the imbalance between supply and demand.
What I do see on the horizon is rising mortgage rates. We’ve seen this rise over the last 2 weeks. This should, in theory, slow the rate of which the home prices are rising; however, this will also make home ownership even harder to obtain. And this still doesn’t fix the supply vs. demand issue.
As with all crystal ball news, we shall see. And if you currently own a home, you have literally won the APPRECIATION lottery in the last 2 years. Give yourself a round of applause. 10/10!
Until next time, Piatt News signing off!
