Home seekers looking to purchase a new home are likely to face a tough selection of properties this spring.
Construction companies built just 70,000 new homes nationwide in April. according to to the Federal Reserve Bank of St. Louis. That’s more than double his amount the builders completed a year ago, but it’s far from meeting the demand. Not enough Americans now face 6.5 million single-family homes.
This shortage comes at a time when the United States is in a housing shortage, with many housing shortages. Homeowners choose not to put properties on the market Because of the fear of having to mortgage another house at a higher interest rate. This trend has reduced the number of existing homes available to potential buyers.
“A lack of existing inventory supported sales of new single-family homes in April,” said Alicia Huey, president of the National Association of Home Builders (NAHB) and a custom home builder in Alabama. Said in a statement this week. “What is even more encouraging is that we are seeing sales growth in the more affordable price range of $200,000 to $400,000.”
The median price of new home sales in April reached $420,800, according to the Fed data.
According to the Fed, the number of new homes completed peaked in 2007, with builders pumping out a whopping 170,000 units each month. That number has been steadily declining over the past decade or so, and this year has been below about 70,000 units per month.
NAHB said the decline in new home completions was due to a shortage of skilled construction workers and supply chain issues. Builders struggle to get distribution transformers, the piece of electrical equipment that sends power from utility lines to homes.
Economists said fewer homes were on the market this year, leading to lower sales. Pending home sales fell 20% in April from a year earlier, according to the National Association of Realtors (NAR). report. It’s not the only reason for the drop, but it’s a crucial factor.
“The issue of affordability certainly remains and continues to hinder deal closing,” NAR chief economist Lawrence Yun said on Thursday. “But a significant increase in housing inventory will be essential to move more Americans.”