Monday, March 19, 2018

The housing market will get even tighter over the course of 2018. More folks are eager to buy, but the supply of homes for sale just isn’t big enough. Competition for listings figures to be fierce. But signs of relief are starting to appear. The market is still plagued by too few homes for sale…the legacy of the construction bust that followed the bursting of the bubble a decade ago. Builders would like to make up for lost time, now that the economy is strong and demand is back. They just can’t. Land is scarce. Skilled labor is even scarcer. Costs of building materials are up. And fewer homeowners are inclined to sell when they know finding a new place could be tough. So inventories of homes for sale will shrink from their already paltry levels…bad news for buyers. The tightest markets are in the West: Several Calif. cities. Seattle. Portland, Ore. Many of them make new construction very difficult, which discourages badly needed supply increases. Close behind: Reno, Nev. Boise, Idaho. Utah. There are fewer restrictions on building in such areas. But people are moving in so fast that builders can’t keep up. Ariz. picked up 100,000 new residents in a single year, for instance…most of them in Phoenix. Such shifts will keep demand strong for years. Many Southern markets will stay hot or heat up further: Dallas, Atlanta. Nashville and Chattanooga, Tenn. Charlotte, Raleigh and Durham, N.C., and much of Fla. The good news for buyers: New-home construction is gradually revving up to meet the demand. Issuance of building permits for single-family homes has doubled since 2011, though construction is still nowhere near high enough for today’s market. And many builders are switching to starter homes, which are sorely lacking. For years, builders focused on high-end luxury homes, which promised better profits. Now there are plenty of big houses and far too few small homes for younger buyers. Mortgage rates are headed higher. But lenders will offer other concessions to cash in on rising demand. In particular, they’ll keep easing their credit standards so that buyers with weaker credit scores will have a better shot at securing a loan

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