Homebuying Woes Remain Despite Highest Construction Rate in 5 Decades
More homes are under construction across the U.S. than at any time over the past 5 decades, but building back from a decades-old housing shortage is proving to be a slow process, NerdWallet reports. About 1.6 million homes were under construction in March, but that share also includes home projects that have been delayed for up to a year or more as a result of material shortages and supply chain disruptions.
As shipments are slowly delivered and trade relationships are restored, inventory will trickle into the housing market at a gradual pace, but won’t offer any quick relief for buyers burdened by record high home prices. Instead, the market will cool over time, likely as a result of higher mortgage rates rather than a rapid addition of new home construction.
When a home is counted as "under construction," it doesn't necessarily mean that workers are swinging hammers. Let's say a house is mostly finished, but the job site sits silent while the builder waits weeks for windows to arrive. That house is officially under construction — even though no one is doing any constructing.
That's what's going on now. Builders can't get their hands on enough supplies to finish homes, said Ali Wolf, chief economist for Zonda, a housing market research platform. Shortages of garage doors, windows, doors, heating and air-conditioning equipment, appliances and cabinets are delaying home completions, Wolf said in an email. And neither the building inspector nor the mortgage lender will let you move into an incomplete house, even when the only thing missing is a garage door.