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WASHINGTON, DC — While the housing industry is poised for “another solid year” in 2021, regulatory and supply-side challenges could harm housing affordability, slowing momentum and limiting growth, according to leading economists speaking at a press conference in conjunction with last month’s IBSx, the 2021 virtual International Builders’ Show.
“Housing affordability will continue to be a top concern this year,” said Robert Dietz, chief economist for the Washington, DC-based National Association of Home Builders, which owns IBSx.
“Limited inventories of single-family homes generated strong price gains in 2020, while supply-side pressures – such as resurgent lumber prices, a shortage of buildable lots, inconsistent access to building materials and a regional skilled labor deficit – foreshadow higher costs and longer build-times this year,” Dietz said.
Housing is one of the few economic sectors experiencing year-over-year job gains, as the industry has hired more workers due to the COVID-19 pandemic, “but that still has not been enough to meet the increasing demand for housing,” Dietz said. Historically low interest rates are one factor driving current demand, but a geographic shift in where people are choosing to live is also affecting the housing industry, as lower-density areas become more popular, Dietz added.
“As the nation ramps up deployment of COVID-19 vaccines, it will be good news for the overall economy and strengthen housing demand, but also place upward pressure on interest rates, which will price additional households out of the 2021 market,” Dietz warned.
Single-family starts posted a 2020 total of just under 1 million, 11% over the 2019 level, the NAHB reported. The forecast is for ongoing gains for single-family construction in 2021, although at a slower growth rate than in 2020.
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February 28, 2021 at 12:16AM
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Housing Seen Poised for 'Solid Year,' Though Challenges Persist - Kitchen and Bath Design News
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