Home News Affordability squeezing homebuyers’ wallets as builders face ‘worst-case scenario’

Affordability squeezing homebuyers’ wallets as builders face ‘worst-case scenario’

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The leader of the country’s largest association of home builders warned Thursday of the “worst case scenario” facing some housing markets as homebuyers are squeezed.

“Right now, in most markets in the country, homebuilders can build affordable homes for first-time homebuyers,” said Jerry Howard, chief executive of the National Association of Home Builders. CEO) said:barney & company“Thursday.” We can’t do that. The cost to us makes that impossible. ”

His comments come as new data from Redfin reveals what homebuyers must do. Earn at least $107,281 To pay a typical US mortgage of $2,682 per month, the annual income to buy a home was $73,000 last year, up 45.6% from last year.

“The income needed to buy a home is well above the median income in the country,” Redfin Chief Economist Darryl Fairweather told Fox Business’s Geri Willis. “And that means that when homeownership used to be seen as a way to get into the upper class, now you have to be part of the upper class to be able to afford a home. That starter. I can afford to buy a house for

Top housing markets this fall are those with affordable housing

According to the Bureau of Labor Statistics, the median average wage for full-time and salaried workers in the United States is $55,640 per yearor $1,070 per week, Q3 2022.

According to recent Redfin data, the income required to buy a typical U.S. home has increased nearly 46% year-over-year, from $73,000 to over $107,000. (iStock)

Howard continued, noting that the housing market showed no signs of improving and that many builders were not looking forward to the spring construction season.

apart from Weekly mortgage rates plunge Howard said there are other hurdles facing the industry, including rising interest rates, attempts by the Federal Reserve to curb inflation, and regulation.

“Consumers have higher interest rates, builders have higher interest rates, supply chains are still broken, and the regulatory burden is increasing,” Howard explained. “The administration has reinstated many of the regulatory concerns that the Trump administration eliminated.”

Home builders build homes to fit the buildable market, according to housing experts. But many companies know that “people won’t be transitioning to homeownership anytime soon,” so the recently completed projects are high-end luxury or multifamily units and apartments.

construction workers build the roof of the house

Jerry Howard, CEO of the National Association of Home Builders, said that with Varney & Co., construction companies are helping build affordable homes for first-time buyers. The cost of building a home has made it “impossible,” he said. Thursday, November 17, 2022. (iStock)

The process behind building permits also creates “problems” for builders, and over-regulation often delays project timelines.

Homebuilders in Massachusetts and Hawaii face a “worst case scenario,” Howard said, arguing that it could take a decade or more from the time a shovel hits the ground to complete construction. I’m here.

“The homebuilding industry has been one of the key strategies of the movement not wanting the growth of environmental enthusiasts,” Howard said. “We go inside and try to build a house, but they find ten or more reasons why we shouldn’t be able to.”

Some home builders who have completed single-family homes but have not yet sold them are looking to the rental market to generate income, or to sell them in bulk to investors at a discount. Some people use it as a rental.

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Regarding the rise in mortgage rates this year, Nevada builder Tom McCormick previously told FOX Business: Dramatically reduce the number of potential buyers for his home.

“They still had good credit and were doing good work,” he said. But rising house prices and interest rates “just pushed them out of the market,” he said.

“I learned my lesson,” he said. “I’ve never seen it change so fast,” he said, referring to the rapid decline in home sales.

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Nicole Friedman of The Wall Street Journal contributed to this report.

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