The US housing market continues to remain a source of strength for the US economy, with demand at record levels. However, the availability of homes on the market – both newly constructed and existing residences – remains low. A lack of affordable homes for purchase affects both the housing market and the US economy as a whole. Not only will fewer people buy new homes, those consumers who spend more on the purchase of a residence will have less money for other things, potentially dampening the economic recovery as the US comes out of the COVID-19 pandemic.
Unfortunately, US consumers should expect to continue to see a tight housing market going forward:
- According to one article, prices of the materials used to build and finish new homes – such as lumber, paint, drywall, and appliances – continue to rise, affecting the new affordability of new homes once they are completed.
- Per another article, builders are continuing to experience shortages of key building materials used to build a home. This affects the ability to complete homes in a timely manner, as contractors and other construction professionals report receiving only partial shipments of key building products, dragging out the home construction process.
When can consumers and construction professionals see relief from high housing prices and shortages of building materials? In the near term, at least, it would appear that these issues will continue to plague home builders and home buyers alike. Freedonia experts will continue to monitor the US housing market to see when conditions become more favorable for the industry.
For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas. Freedonia Custom Research is also available for questions requiring tailored market intelligence.