When we read about the current housing market, a term that often comes up is "limited inventory." So, why don't we just build more homes? Turns out it's not that easy. Builders have been facing a series of ongoing supply-side challenges stemming from skilled labor, lot shortages, lending issues, rising material costs, and regulatory barriers that have made it difficult to deliver more homes. Let's break it down. • Labor: The manual labor and workforce needed to construct (aka you need more hammers at work to build more homes). • Lots: Residential land that is available to buy and build on. • Legal Issues: Regulations imposed by all levels of government that everyone must abide by and ultimately make the process more expensive. • Lumber: The materials needed for residential construction costs, which remain more than 40% higher than pre-pandemic. • Lending: Financing availability and affordability. Overall levels of credit supply remain tight and interest rates elevated. Were you aware of these factors? Let us know in the comments below.
