The current housing demand and effects to home buyers
The real estate season is starting to heat up and there is one thing on everyone’s mind. Where are the homes? Currently, there are not enough homes to satisfy the demand in the market. And, the biggest reason is that new home construction has not risen to meet the steady demand for housing.
This is especially true in the more affordable price ranges. Today, only about 1 home in 10 is a new build. This takes the highest toll on first time home buyers who typically have a tighter budget. In January, first time home buyers fell to only 29% of the market down from 33% compared to last year.
Higher prices and lack of inventory seem to be taking their toll just about everywhere. However, it seems like the builders are starting to pay attention to the waiting demand. Last month builders completed more new homes then they have in almost a decade but there is still plenty of room to grow. New home construction tends to be a little more expensive than older homes, but hopefully the builders will look to increase the market in the more affordable home ranges. Will possible steel tariffs put a wrinkle in the cost of affordable new home construction? I guess only time will tell.