Economists presenting at the recent 2022 International Builder’s Show in Orlando predicted the compressed housing inventory and high buyer demand, combined with supply chain shortcomings and the ongoing labor shortage will maintain the hot pace of the housing market and its associated impacts on affordability.
National Association of Home Builders Chief Economist Robert Dietz reported materials costs have increased 21% Year-over-Year. NAHB has estimated residential construction will have to add 740,000 workers/year to keep pace with demand.
Another challenge confronting affordability is the combination of rising inflation and the impending commencement of rate increases from the Federal Reserve to contain it.
Because of the array of challenges, NAHB expects single-family construction growth to be modest. Single-family starts are projected to increase 1.0% this year. Multifamily starts are expected to increase 6.3%, or approximately 496,000 units. Overall housing production is expected to see growth of 2.5% to an annual pace of 1.63 million. (Source)