Currently Reading

NAR Study Says Years of Underbuilding to Blame for Housing Shortage

Advertisement
Construction

NAR Study Says Years of Underbuilding to Blame for Housing Shortage


July 19, 2021
homes
Photo: tamas | stock.adobe.com

The United States needs anywhere from 5 million to 6.8 million more housing units to meet housing needs, according to a recent study by the National Association of Realtors. Home prices and rents are rising rapidly because of the severe lack of supply, says the Washington Post, and the study says low supply results from years of underbuilding. In 2009 the opposite issue burdened the market: There were too many homes for too few buyers. But with economic recovery came the increase in home prices and rents. It will require “a major national commitment to build more housing of all types” to solve the crisis, consultants wrote in the study.

The National Association of Realtors (NAR), whose membership is said to be at or near an all-time high and who clearly benefit from having more housing product to sell and lease, is proposing an unprecedented push on the supply side: more and better funding capabilities, changes in zoning to accommodate more units in smaller spaces, converting underutilized commercial space to residential homes, and using the might of the federal government “to help address construction capacity challenges such as rising construction costs and labor and materials shortages.”

“There is a strong desire for homeownership across this country, but the lack of supply is preventing too many Americans from achieving that dream,” said Lawrence Yun, NAR’s chief economist, in the news release announcing the report. “It’s clear from the findings of this report and from the conditions we’ve observed in the market over the past few years that we’ll need to do something dramatic to close this gap.”

NAR and the National Association of Home Builders, among others, predicted back in 2011 and 2012 that supply would be a problem by 2017. Mortgage interest rates, which hit 15 new historic lows last year, aren’t helping. Home buyers, and homeowners, have been rushing to take advantage of what many imagine will be the last chance to lock in a 30-year mortgage at under 3 percent.

With the Federal Reserve Bank’s recent admission that inflation is rising faster than expected, mortgage interest rates are likely to follow, industry experts say. And that will naturally slow down housing demand from the current frenzied pace.

Read More
 

Related Stories

Labor + Trade Relations

More Young Workers Enter Construction Industry, Changing Median Worker Age

More needs to be done for recruiting new workers into the construction trades, says the National Association of Home Builders, but recent data…

Government + Policy

Senate Reinstates Water and Sewer Exemption in Bipartisan Infrastructure Bill

The National Association of Home Builders sought to restore an exemption for water and sewer contributions in aid of construction in the Senate…

Building Materials

What Saw Mills Experienced During Lumber Price Spikes and Why

Remodeling, DIY, and home building demand pushed lumber prices to new heights this past year, and it might make sense to believe lumber mills…

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.