Move-up buyers have their eye fixed on new-home construction at a rate not seen in years and builders are trying to keep up. According to a new report from the National Association of Home Builders, single-family housing starts ended 2020 with the best year in home building since the Great Recession and up 11 percent from 2019.
In a press conference last week, NAHB chief economist Robert Dietz said that he believes new-home construction will grow by another five percent in 2021 and surge above one million new units for the first time in several years.
Still, builders are falling short in their attempt to balance out supply and demand. This is largely due to growing challenges in the construction industry including a rise in costs. Lumber prices alone are up 169 percent from April 2020. In a survey, 96 percent of builders reported this to be a major obstacle toward bringing new homes to the market.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.25 percent.
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