Keller Williams Capital Partners

  • Home
  • /
  • The low-priced home shortage continues
The low-priced home shortage continues
  • Aug 27, 2018
  • New Home Ambassador
  • new home construction new home builders new home communities builder trade in program new home ambassador

The nationwide housing shortage continues but is especially troublesome for homebuyers with a budget of $250,000 or less, Susan Wachter, professor of real estate and of finance at the Wharton School of Business at the University of Pennsylvania, told CNBC on Monday.

Rising labor, land and material costs are slowing down the supply, "except at higher prices, which is simply not affordable for the great middle, and that’s where we see the hit in ... existing sales," Wachter said on "Power Lunch."

Sales of existing homes are down for the third month in a row due to a shortage of properties, which results in higher prices and pushes some potential buyers out of the market.

Existing home sales fell 0.6 percent in June, or 2.2 percent from June 2017.

And as prices for new home construction increase, construction in general is on the decline. Housing starts, or the number of new residential housing projects, decreased in June, plunging 12.3 percent. The loss represents the third month in a row of declines or a nine-month low.

"That sets a price point for the existing sale market as well," Wachter said. And with inventory at historic lows and a lack of new construction, existing homeowners are holding on to their homes longer, Wachter noted.

That spells trouble for first-time homebuyers and those looking to upgrade, such as growing families. 

Meanwhile, inventories in luxury homes valued in the million-dollar range are increasing slightly, Aaron Terrazas, economic research director at Zillow, said on "Power Lunch."

But, "those affordable, entry-level homes are still facing a lot more demand than their supply," he said.

Free Evaluation

We are passionate about creating innovative technology that deepens the connection between people and the things they care about most – their homes, families and businesses. Millions of people trust every day for better security, advanced automation and dependable service.

Mohawk Flooring

As the world's largest flooring company, Mohawk provides unlimited style and design options from over 30 flooring categories. The extensive Mohawk family of brands covers every floor type— carpet, rugs, tile, hardwood, laminate and more— and includes highly reputable names trusted by millions

Sherwin Williams

When is red not just red? When it's Cherry Tomato, Fireworks or Habanero Chile. Browse the nine color families below and see how with over 1,500 Sherwin-Williams colors, there's something for every mood, every space and every project.

Solar City

SolarCity was started by two determined brothers with a better way to deliver clean, more affordable energy. Founded in 2006, SolarCity has since grown to become America’s largest solar provider with more than 10,000 employees. We’re just getting started.