Limited housing continues to increase home prices as homeowners who secured low interest rates are reluctant to move. But building new houses isn’t an easy fix to the problem.to the lowest level in almost 30 years. The market won’t experience a significant recovery until interest rates start to fall.
However, high mortgage rates, which hover around 7%, combined with elevated construction costs and high land prices, continue to hamper builder sentiment.“Persistently high mortgage rates are keeping many prospective buyers on the sidelines,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “Home builders are also dealing with higher rates for construction and development loans, chronic labor shortages and a dearth of buildable lots.
Builders offer incentives such as price reductions, interest rate buydowns, and assistance with closing costs to attract buyers, said