The shortage of labor and rising costs of construction mean that builders are not able to keep up with demand for new homes, Freddie Mac says
The shortage of labor and rising costs of construction mean that builders are not able to keep up with demand for new homes, Freddie Mac says.
In its latest market outlook, the corporation highlights a 14% slump in housing starts since the end of 2016 and points to struggles for builders in finding skilled workers – many have not returned to the industry following the recession - development land costs increasing, and burdensome regulations on land use.
A decade after the Great Recession, the housing market is rebounding. House prices today are higher than they were at the peak in the summer of 2006, near-record-low mortgage rates have boosted housing demand, and sales volume is robust,” said Sean Becketti, Freddie Mac chief economist.
“The spoiler is the lean inventory of houses for sale. Nationally, just over five months of supply is for sale and hot markets are much tighter than the national average. So far, residential construction is not doing much to fill the gap," he added.
Freddie Mac expects housing starts to remain below their long run average with a total of 1.27 million by the end of 2017.
Despite house price growth that's expected to be above 6% for the year, house demand remains strong. Low mortgage rates are helping to fuel strong housing demand and are expected to stay around 4% for the rest of the year.
In its latest market outlook, the corporation highlights a 14% slump in housing starts since the end of 2016 and points to struggles for builders in finding skilled workers – many have not returned to the industry following the recession - development land costs increasing, and burdensome regulations on land use.
A decade after the Great Recession, the housing market is rebounding. House prices today are higher than they were at the peak in the summer of 2006, near-record-low mortgage rates have boosted housing demand, and sales volume is robust,” said Sean Becketti, Freddie Mac chief economist.
“The spoiler is the lean inventory of houses for sale. Nationally, just over five months of supply is for sale and hot markets are much tighter than the national average. So far, residential construction is not doing much to fill the gap," he added.
Freddie Mac expects housing starts to remain below their long run average with a total of 1.27 million by the end of 2017.
Despite house price growth that's expected to be above 6% for the year, house demand remains strong. Low mortgage rates are helping to fuel strong housing demand and are expected to stay around 4% for the rest of the year.
