A lack of buildable lots and a shortage of skilled labor are among the major issues facing homebuilders. With builders unable to find qualified workers to fill vacant positions, the rate of job openings in the construction industry is now greater than during the housing boom in the early 2000s.
The skilled-labor shortage is likely to continue. Many young workers joined the industry during the boom, but lost their jobs during the Great Recession. When the energy sector began to slow down a couple of years ago, many of these workers were expected to rejoin the building industry. For a variety of reasons, though, a large share didn’t return to their old positions or other jobs in the industry. The average age of construction workers is around 41 years old. The average age was much lower during the construction boom of the early 2000s, indicating that the industry has lost many younger workers. The industry has started to make efforts to recruit younger people, but the product of these efforts isn’t likely to materialize right away. Continue reading “Some Hurdles Hamstring Homebuilders”
Low inventories of homes, especially those at the lower end of the price range, should keep rising mortgage rates from pulling down sales growth much. But home price gains are likely to slow, especially for homes at the higher end of the price range and ones in large metro areas of the West where price growth had been high for a while.
Thirty-year fixed mortgage rates have risen by about half a percentage point since the election. For a new $250,000 loan with a 20% down payment, the principal and interest payment has risen by $55 per month. The annual income a borrower needs to qualify for that loan is now $44,000, up from $42,000 earlier. Qualifying income for those who make a down payment of 5% has risen from $50,000 to $53,000. For a $350,000 loan with 20% down, the increase in the monthly nut will be $80, with qualifying income at $65,000, versus $62,000 earlier.
Continue reading “What Rising Interest Rates Mean for the Housing Market”
If Democrats hold on to the White House, will that help the price of your home? Or would the housing market fare better with a Republican victory? The fact is, it won’t matter much which party wins the White House in November — at least not when it comes to housing prices.
A study of real estate in California going back to 1980, found that housing prices rose by as much as 6% in the year before an election and about 5% in the year after an election, but only 4.5% during election years. A possible explanation for the slower price growth is that presidential elections create uncertainty, making people less likely to take chances on large purchases, thus slowing down the rate of increase in home values.
The California Association of Realtors has looked at home prices in the state dating back to 1990 and found that elections historically have had little or no negative impact on the California housing market. It did find that house prices rose slightly faster in the last months of the last five presidential elections.
Continue reading “How Will the Presidential Election Affect the Housing Market?”
Prices up 5% on average in major metro areas
Favorable mortgage rates and healthy job growth will spur home buying and residential construction in coming months.
Continue reading “Housing Market Keeps Its Momentum”