According to Kermit the Frog, it isn’t easy being green. And now, according to millennials, it isn’t easy being a young homebuyer because of the lack of affordable new homes, Realtor.com reports.
Unfortunately, this issue isn’t quite so simple that a two-minute song can offer a solution. There are multiple issues at play, and there simply isn’t one overarching way to overcome them. With new rules and regulatory costs popping up through every step of the process, builders are struggling to keep their own costs down, let alone the cost of the house for buyers.
Another major factor is the rising cost of labor. According to NAHB, the construction industry remains about 900,000 laborers short of what it requires. With less labor, construction times increase, and the cost of labor increases, as well. Another problem is that some contractors are reluctant to work with the same builders who stiffed them on their fees or paid less than promised for labor when the recession hit.
Loans, especially those needed by smaller builders to finance their new construction, have also become difficult to acquire. Many lenders became very conservative about AD&C loans after the recession.
There is some hope, however, and it comes in a strength-in-numbers type solution. Because the massive generation of millennials is starting to enter the home buying market, builders are going to find it increasingly difficult to ignore such a large share of new buyers.