More potential home shoppers may be getting spooked by recent news headlines about the housing market, and they may be making them skittish. Sixty-two percent of surveyed home builders say “negative media reports” have made it problematic for them in attracting buyers this year, among the top concerns they identified to attract buyers, according to a survey by the National Association of Home Builders/Wells Fargo Housing Market Index.
Other issues builders say are making buyers cautious this year: gridlock and uncertainty in Washington (53 percent); concern about employment and economic situation (46 percent); buyers who expect prices or interest rates to decline if they wait (31 prices); and buyers unable to sell their existing homes (24 prices).
Home builders expect higher interest rates to pose a bigger threat this year, too. Fifty-six percent of builders expect higher interest rates to make buyers cautious in 2019, up significantly from 27 percent who called high interest rates a problem in 2018.
Single-family home building has lagged over the last few years, despite pressing calls from the real estate industry for builders to build more to respond to inventory challenges across the country. But builders say several headwinds—particularly over rising costs of materials and labor—have made building harder.
The top “significant problems” that builders say they expect to face this year deal with the rising costs of building materials (69 percent); the cost and availability of labor (82 percent); the cost and availability of developed lots (63 percent); and the impact, hookup, or inspection fee, or other fees (61 percent).
Source: “Top Challenges for Builders: Materials in 2018, Labor in 2019,” National Association of Home Builders’ Eye on Housing blog (March 18, 2019)
