Across the nation, homebuilders are sounding the alarm on a mounting affordability crisis gripping the housing market. In Wichita, Kansas, local builder Carl Harris, who chairs the National Association of Home Builders (NAHB), has witnessed the price of his new homes skyrocket, putting them out of reach for many families.
“The payment on that home two and a half years ago was about $1,700. Today, it is just over $3,000,” Harris told NBC News. “That continues to lock several people out of the market, and that’s where the true concern is.” This alarming trend highlights the severity of the issue.
Homebuilders nationwide are grappling with soaring demand for affordable housing while facing spiraling construction costs. The additional $120,000 that Harris has to charge on his homes covers the ballooning expenses for materials, labor, and land. He believes it’s not just a housing crisis, but a housing policy crisis, and that correcting policy could potentially bring down some of the costs and ease the pressure on existing homes.
Experts like Robert Dietz, chief economist at the NAHB, acknowledge the complexity of the situation. “There’s no single simple, scalable solution,” Dietz said. “It took us about a decade to get into this situation. It will probably take us about a decade to get out.”
The problem is multifaceted. Single-family home construction declined by 6% last year, and the number of new builds in July mirrored 2017 levels. Homebuilders say they are facing a web of challenges, with a severe labor shortage being a primary concern. The construction industry lost over two million workers after the mortgage crisis of 2007, leaving hundreds of thousands of jobs unfilled.
“We can only deliver so much housing because of the labor constraints, and so we’ve got to continue to figure that out,” said Sheryl Palmer, CEO of homebuilder Taylor Morrison.
In response to the crisis, the NAHB presented a 10-point plan to Congress in July, aimed at addressing the affordability issue. The plan includes reducing excessive regulations, fixing supply chain issues, and promoting careers in the skilled trades.
Steve Martinez, an Idaho homebuilder, testified before lawmakers, emphasizing the significant impact of rising housing costs on American families. “Shelter inflation – rent and homeownership costs – is still rising well above a 5% rate, driven in large part by a nationwide shortage of 1.5 million housing units,” Martinez said. “The only way to tame inflation and bring housing costs down is to remove the barriers preventing homebuilders from increasing housing production.”
With the high personal and economic stakes involved, homebuilders are urgently appealing to policymakers for action. As one builder aptly stated, “I don’t think people realize and appreciate how many factors are involved in doing what we do.” The need for a comprehensive and collaborative approach is clear, as the housing affordability crisis continues to impact families across the country.
