I just read comments from Jerry Howard, the CEO of the National Association of Home Builders, who observed “the housing market is currently in a recession and the nation is facing a growing housing affordability crisis.” He further noted “builders are reporting concrete shortages in several states and a dearth of transformers that provide electricity to homes which is halting development across much of the country.” Bingo! I hear Omaha may be rationing concrete but, fortunately, that is not yet in store for Lincoln. HBAL members just met with LES to discuss the shortage of transformers. While misery may love company, I don’t love misery. A slow down in the industry is certainly miserable. Interest rates over 6% put a terrible damper on the market. I recently took a look at what that means for a purchaser. A median income Lincoln buyer can only afford a $225,000 home (with 6.91% conventional mortgage). That pretty much forces new home customers into well above median income (150%) even for modestly priced new construction ($341,000 was the 2021 median price for new construction). But here is my message: We have to be cautious and persevere. The housing shortage is too acute to allow us to quit building. A new house built for an existing home owner will open a home upon closing. So every house helps.
Hey, look on the bright side: the drought has given us perfect weather for construction.