Jerry Howard, CEO of the National Association of Homebuilders, spoke with Yahoo about the reality that’s happening right now in the real estate market in this article.
We got mortgage rates falling to 6.61%. Jerry says, “this is as bad as it’s been since 2011. It did get into single-digits during the depth of the Great Recession. I don’t think we’re going to go anywhere near that. But I think it’s not going to bounce back anytime soon either.”
Jerry also talks about their biggest problems right now in this market, which are that members are really concerned about a couple of things– the cost of capital, not just mortgage rates.
When the end consumer has to pay more, the builder’s paying more for capital as well up upfront. The cost of capital and the availability of capital in the commercial banks seems to be tightening.
Likewise, we still have problems with the supply chain. We still have problems with regulations. And we still have problems with labor. So we’re facing pretty much a perfect storm right now.
What is the solution that Jerry offers in the article?
If rents keep going up, then renters who want to be homeowners aren’t able to save enough money to get into the housing market. And that becomes a problem.
So we want to see rents get stabilized through the markets, not through government mandates. We’d like to see rent stabilized and the best way to do that is to make sure we have enough production.