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We have seen this
before in 2006-2016 they built very little medium priced homes. The
regulations and the interest rates were not favorable. Most people did
not like the economy and were concerned about the future at that time.
There were 10+ million homes for sale in 2008-2009 new home builds came
to a halt.
You
remember the fences around subdivisions? The builders literally just
stopped building medium priced homes for a decade. No lending was really
available and that destroyed the market at that time.
Fast
forward to today and you have people not liking the economic future for
their finances. Builders are slowing down on the new builds. Financing
is still here, interest rates are up but 5%-6% is still a great rate.
Inflation
is another key factor to the new builds which is not mentioned in a lot
of the articles I read. It costs more to buy materials and that
translates to higher cost to the new home buyer. Translate that into how
that will affect the future real estate prices?
That
being said, existing home stock that is for sale may be a great
purchase. With inventory going up (Still 1/2 of the 2008-2009 inventory)
the real estate market will stabilize which will be good for all
parties Buyer, Sellers and Investors.
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Thank you