'It's Not A Housing Crisis, But A Housing Policy Crisis': Homebuilders Call Out Roadblocks As Prices Surge
Across the country, homebuilders are sounding the alarm on the mounting affordability crisis gripping the housing market. In Wichita, Kansas, local builder Carl Harris has watched 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, who chairs the National Association of Home Builders, said to NBC News. “That continues to lock several people out of the market and that’s where the true concern is.”
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Harris isn’t the only one feeling the squeeze. Homebuilders nationwide struggle to keep up with soaring demand for affordable housing as construction costs spiral. The additional $120,000 Harris has to charge on his homes covers the ballooning expenses for materials, labor and land.
"It's not a housing crisis, but a housing policy crisis and if we can get those who make policy to correct policy, then maybe it can bring down some of the costs and lessen the fighting over existing homes," Harris said.
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Benzinga previously reported a nationwide shortage of about 1.5 million housing units, which has fueled a 50% surge in home prices over the last five years.
Affordable housing is a flashpoint issue for voters before the presidential election.
“There’s no single simple, scalable solution,” Robert Dietz, chief economist at the NAHB, said. “It took us about a decade to get into this situation. It will probably take us about a decade to get out.”
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With single-family home construction down 6% last year and the number of new builds in July matching levels from 2017, homebuilders say a web of challenges ties their hands. A severe labor shortage tops the list – the construction industry lost over two million workers after the mortgage crisis of 2007, leaving hundreds of thousands of unfilled jobs.
“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.
The NAHB pressed Congress earlier in July to enact a 10-point plan to address the affordability crisis, including reducing excessive regulations, fixing supply chain issues and promoting careers in the skilled trades.
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Steve Martinez, an Idaho homebuilder testifying on behalf of the group, told lawmakers that housing costs have become the largest single expense for 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, homebuilders are pleading for policymakers to act. As Forsum put it, “I don’t think people realize and appreciate how many factors are involved in doing what we do.”
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