Builders Helping Builders: What’s Up With Starts?

Filed in Economics by on March 29, 2015 0 Comments

ThinkstockPhotos-481796443Builders Helping Builders is an interactive blog post that allows members to tap into the vast knowledge and experience of the entire Federation in one convenient location. Each week, a new question—submitted by an NAHB member—will be featured in the Monday Morning Briefing and here on the blog.

This week’s question: Why were last month’s starts numbers so bad?

David Crowe, NAHB’s chief economist, offered the following:

Aside from a small weather impact in the Northeast and Midwest, builders are telling us they are worried that buyers are unable to attain a mortgage because of tight underwriting standards and that buyers continue to expect large price concessions and discounts.

And while buyers are expecting discounts, builders are facing higher costs and reduced availability of lots on which to build the homes and workers to construct them.

This squeeze is causing builders to slow construction until new home prices rise, consumers regain confidence and the supply chain for lots, labor and, to a lesser extent, building materials rebuilds.

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