The mid-pandemic housing boom is tapering off as inflation and elevated interest rates make homeownership increasingly unaffordable for a growing number of Americans, but despite softening demand, home prices are still on the rise. A 10-year housing deficit has created an undersupplied and overpriced market, and even as builders pick up the pace of new construction, shortages are intensifying, according to Insider.
Throughout the pandemic, the cost of building a new home surged thanks to record high materials prices and supply chain disruptions. Between labor and materials shortages and ineffective zoning regulations, roadblocks are mounting for new-home construction projects even though boosting supply is a vital first step in addressing and solving a prolonged affordability crisis.
Robert Dietz, the chief economist at NAHB says that the US government will need to work with the construction industry to boost the affordable housing supply.
"Policymakers need to focus on mending broken building material supply chains and reducing ineffective zoning and other regulatory policies to help bend the cost curve and enable builders to boost attainable housing production," he said in a statement.