Lower housing inventory has been an ongoing issue in the recovering real estate market and a new study from the National Association of REALTORS® (NAR) finds that new home construction is not keeping pace with a strengthening labor market in many metro areas. Of 146 metropolitan areas studied by NAR, around two-thirds are seeing underperforming homebuilding activity. Read the news release from NAR.
From NAR Chief Economist Lawrence Yun: “In addition to slow housing turnover and the diminishing supply of distressed properties, lagging new home construction — especially single family — has kept available inventory far below balanced levels. Our research shows that even as the labor market began to strengthen, homebuilding failed to keep up and is now contributing to the stronger price appreciation and eroding affordability currently seen throughout the U.S.”
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