Home builders face a long timeline to fill the nation's housing shortage. But they still have plenty to offer in a difficult market.
The nation has a shortage of approximately 1.5 million homes, according to the National Association of Home Builders. The lack of inventory is the result of what NAHB Senior Vice President and Chief Economist Rob Dietz describes as the five "Ls", factors which arose following the last housing crisis.
"It took us about a decade to get into this housing deficit, and it's probably going to take us about a decade to get out," said Dietz.
Rob Dietz, senior vice president and chief economist at the National Association of Home Builders.
Herman Farrer/Herman Farrer Photography
Today's high rates have created a "lock-in" effect for existing housing stock, and builders have swooped in to capture demand. A third of current market inventory is new construction, according to the NAHB, and builders are developing smaller, more competitive properties with sales incentives expected to stay as long as rates remain elevated.
National Mortgage News spoke with Dietz about the timeline to solve the inventory shortage, how new homes stack up against existing inventory, and sectors of the industry to watch.
This interview has been edited for length and clarity.
