Despite increasing demand for new homes, regional and smaller builders are having a hard time getting lots because they are being outbid by national builders, according to Mark Vitner, a senior economist at Wells Fargo Securities.
“There is a real split in the housing market today,” he told NMN.
Due to their access to capital, the big national builders are getting lots of orders and they are scooping up building lots.
The frustration among the smaller builders is showing up in the
(Any reading over 50 indicates more builders view conditions as good rather than poor.)
“Although many of our members are reporting increased demand for new homes in their markets, their enthusiasm is being tempered by frustrating bottlenecks in the supply chain for developed lots along with rising costs for building materials and labor,” said NAHB chairman Rick Judson, a homebuilder from Charlotte, N.C.
He also noted that problems with appraisals and credit availability remain obstacles to completing deals.
NAHB chief economist David Crowe pointed out that the industry is facing infrastructure constraints.
Since the housing bust in 2006, the homebuilding industry has lost building material production capacity, construction workers and the pipeline of developed lots.
“The road to a housing recovery will be a bumpy one until these issues are addressed, but in the meantime, builders are much more optimistic today than they were at this time last year,” Crowe said.
