Inventory, inventory, inventory. Real estate is all too familiar with the battle. It’s a long tug-of-war game that continues to play out – where are we currently?
According to the Commerce Department’s latest report, buyers are targeting new-home construction as they search for the home of their dreams in the small pool of current inventory. New-home sales in October were 41.5% higher than they were a year ago.
Inventory has remained a strain at a 3.3-month supply at the current sales pace. High buyer demand isn’t the problem – it’s finding the home.
Robert Dietz, the National Association of Home Builder’s Chief Economist, explains, “the gap between construction and sales was at an all-time high in early fall. Thus, the NAHB forecast contains an acceleration in single-family starts and some slowing of the pace of growth for new homes sales to allow a catch up. Demand remains strong as home buyers seek out lower density markets as part of the suburban shift.”
New home construction is what many home buyers look to when purchasing a home, since many current homeowners are staying in their homes longer than years prior. At the moment, homebuilders cite ongoing labor and lot shortages as well as rising lumber prices as reasons new-home construction has slowed.
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