LAS VEGAS — Another day, more troubling numbers for the U.S. housing market.
The National Association of Home Builders forecasts builders will get started on 909,000 new homes across the county over the course of 2018, chief economist Robert Dietz said during a panel discussion at the National Association of Real Estate Editors conference here Thursday. The problem is that figure will fall 300,000 short of demand.
“We continue to under build single-family housing,” Dietz said. “(So) home-price growth should continue to outpace income growth due to the scarcity.”
The prediction jibes with data being tracked by Seattle-based real estate brokerage Redfin. In a newly released assessment of 174 U.S. metro areas, Redfin found that home prices went up an average of 6.3 percent last month over a year ago. In Denver, average home prices crept up just slightly May over April, hitting $415,500. But that figure is 10.4 percent higher than the average price Redfin tracked in the metro area in May 2017.
Housing demand is searing in Denver. Redfin found the average home in the market went under contract just six days after being listed for sale last month.
Dietz attributes the nation’s under-building largely to supply-side pressures. Labor and land shortages continue to plague the industry. A meteoric rise in lumber costs is also dragging down new-home starts.
“The primary factor for it is due to tariffs on Canadian softwood lumber. We have effective 20 percent tariff rate right now on Canadian lumber,” Dietz said at Thursday’s discussion. “A lumber tariff is very much a tax on homeowners and renters.”
A survey of American homebuilders demonstrates that rising lumber costs — up 62 percent since the start of 2017, according to one index that Dietz is tracking — have driven up the costs of a typically built new home by $9,000.
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Source:: The Denver Post – Business