NREPbooks – Join the Club!
New book selection Tuesday at 12:00 Noon Pacific
The soaring prices in the U.S. housing market have left many feeling frustrated and taken advantage of. Zillow estimates the total value of the market is now $52 trillion, attributing this to home-builders working to increase supply. But are builders really doing all they can to provide affordable inventory? I’m skeptical.
Permits and housing starts are up, but actual completions lag behind. This indicates builders are being selective, prioritizing more profitable, higher-end homes over affordable options. Consider that builders now have just 76,000 completed homes for sale nationally. For a country of nearly 400 million people, that woefully inadequate.
At the same time, apartment construction is booming. While additional rental units may provide some relief for renters, it also serves builders’ interests. Renters miss out on the equity and stability of home-ownership. Plus, large corporate landlords like BlackRock stand to benefit greatly from a nation of perpetual renters.
Elections are coming up. We should demand housing affordability and accessible home-ownership take center stage. Builders claim lumber costs and labor shortages make low-margin homes unfeasible. But they have a fiduciary duty to maximize profits. And restricting supply is an age-old tactic for keeping prices high.
Home-builders, real estate investors, and corporate landlords will continue putting profits over people until we force the issue. Don’t let them placate you with promises of “relief” in the form of endless rent increases. The cavalry isn’t coming to save the day unless we make housing reform a priority. The stability and prosperity of future generations depend on it.
