Freddie Mac: Why We are Building So Few Houses?

Posted To: MND NewsWire

Freddie Mac's Outlook this month looks at what it calls "the spoiler," the lean inventory of newly constructed homes for sale. While the situation isn't quite as dire as with existing homes, where there is a 4.3-month supply, the new home inventory is just over a 5 month supply and, Freddie Mac's economists point out, it is much tighter in hot local markets. So far residential construction is not doing much to fill the gap. Building permits dropped by around 70 percent during the Great Recession and have not yet recovered. In fact, when measured in relation to the population, they are only at about half the level of 2006. Freddie Mac says that with prices rising and housing demand high, one would expect builders to pick up the pace, but clearly, they are not. The main reasons appear to be a...(read more)

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