Is a housing shortage coming?
If shrugging off the worst housing crash since the Great Depression, it is not hard enough, you have to brazen for a housing shortage. Just 672,000 new homes were started in April, less than half the long-term run rate needed to meet the nation’s natural population growth. “It is ironic, but there is a growing consensus that there may be a new housing shortage coming,” said James Gaines, a real estate economist with Texas A&M. So far, the shortfall has been masked by a weak economy that has put a damper on home buying. Once the job market rebounds, however, people will look to have their own homes again. This pent-up demand could get unleashed on unprepared markets, causing shortages and rising local prices. But, those doubting a new bubble is near, point to a large inventory overhang. As many as 7 million homes are vacant but not for sale, according to the Census Bureau, which should provide cushion to offset increased demand.
Ordinarily, the nation’s home builders can react quickly to meet surges in demand. But several factors are preventing them from being nimble. The biggest is the difficulty getting loans, according to Jerry Howard, CEO of the National Association of Home Builders (NAHB). Too, many builders went out of business in the bust, so there will be fewer companies out there to do the building. The survivors will confront a transformed regulatory environment, according to Howard, that will make new homes harder to build and more expensive.
Related posts:
- Buffett Predicts Housing Recovery Will Happen In 2011
- Employer-Assisted Housing Forum Helps Make Homeownership More Affordable (Marketwire)
- Employer-Assisted Housing Forum Helps Make Homeownership More Affordable (Marketwire via Yahoo! Finance)
- Loose Lending Didn’t Create the Housing Bubble
- Top 5: PDX home prices dip below $240,000 for first time in 4 years (The Oregonian)
