Despite the low inventory of home for sale and the high demand, new home construction is up only marginally from 2017. Why? According to the National Association of Home builders (NAHB) there are several reasons:
- Shortage of labor: Despite low overall unemployment, the housing industry has only recovered 50 percent of the jobs lost during the recession
- Higher lumber prices: As of Feruary, lumber prices were up 45% year over year, which will only get worse due to the new tariff on Canadian lumber
- Shortage of available lots: 65% of home builders say that land shortage is a major constraint on the construction of new homes
- Regulatory costs: Government agency costs have risen over 29 percent since 2011
- Available financing: Since the recession, lending standards have been tightened for both homebuyers and builders of multi-family projects. This may be easing.