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Home Builders Raise Affordability Concerns
The latest data from the National Association of Home Builders (NAHB) shows housing starts rose 3.2 percent in November. Year-to-date, new housing starts were 5.1 percent above their level over the same period last year.
Despite the positive news, homebuilders are growing increasingly concerned about housing affordability issues. “While a solid economy and favorable demographics support healthy demand for housing, growing housing affordability concerns are causing consumers to hesitate on making a home purchase,” said NAHB Chief Economist Robert Dietz. “Builders need to manage supply-side costs to keep home prices competitive for buyers at different price points. Policymakers must also actively engage by taking appropriate steps to ease needless regulatory burdens that will help stabilize residential market conditions.”
Despite growth in overall housing starts, single-family starts fell 4.6 percent to 824,000. According to NAHB, “single-family production has now dropped for the third straight month. Meanwhile, multifamily starts—which include apartment buildings and condos—rose 22.4 percent to 432,000.”
“The decline in single-family production over the last few months makes sense given the drop in our builder confidence index,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Builders are cautious to add inventory as housing affordability concerns are causing consumers to pause on making a home purchase.”
VI is working with NAHB and other key stakeholders to address housing affordability, including regulatory reform and housing finance reform, among others. If you’d like more information on supporting these efforts, please contact John Serrano at email@example.com.