Good Monday Morning!

The shortage of available housing continues both nationally and locally.  The escalation in home prices caused by extreme demand, high cost of lumber and building supplies and the shortage of skilled labor have all lead to a huge problem for those wanting to purchase homes.  Right now the shortage of affordable housing is extreme and the situation is not improving.  In the Eugene and Springfileld area, high housing costs, the lack of affordable building sites and the high cost of material and labor are creating a situation where home buyers are forced into the market of existing homes. This has been the perfect storm for creating a housing shortage.  The following is an article from "Realtor.com" that talks about this problem nation wide.

The numbers: Construction on new homes rose slightly in May, but high lumber prices and labor shortages have stymied builders and could leave many customers frustrated as the busy U.S. summer home-buying season gets underway.

Builders started construction on new homes at a 1.57 million annual pace in May, the U.S. Census Bureau said Wednesday.

In other words, that’s how many houses would be started in a year if construction companies did the same amount of work every month as they did in May.

The increase was somewhat of mirage, however. April’s originally reported increase of 1.57 million was trimmed to 1.52 million.

Permits to build new homes, meanwhile, fell 3% last month in another sign of the trouble builders are running into. They slipped to an annual rate of 1.68 million from a revised 1.73 million in April.

Big picture: Demand for new homes is sky high with the economy recovering from the pandemic and mortgage interest rates still near rock bottom. Housing starts and permits recently hit a 15-year peak.

The problem is, construction companies simply can’t build new homes fast enough or keep the prices within most the range of most buyers.

High costs of raw materials, a shortage of skilled workers, and a limited number of vacant lots all pose barriers to new construction.

The result: Home shoppers should expect a limited selection of properties of sale and higher home prices, potentially limiting the number of buyers.

Applications for new mortgages, for example, have declined recently in a sign that higher prices are scaring away buyers.

What’s compounded the problem is a paucity of existing homes for sale. Listings have tumbled 13% since they touched a 14-year high last October.

The housing market has been a big contributor to the U.S. economic recovery. It’s likely to continue to play a big role, just not as big as it has in the past year.

Key details: New construction on single-family houses increased by a solid 4.2% to 1.1 million rate in May, but permits declined again. Permits have fallen almost 11% from a 15-year high in January.

About two-thirds of new units built are single-family homes.

Builders also started work on more multi-family projects with at least five units: Condos, townhouses, apartment buildings and the like. They increased 4% to an annual rate of 465,000.

Permits on multi-family units also fell, however.

Construction increased sharply in the Midwest and grew more slowly in the South and West. Only the Northeast saw a decline.

Home building is much higher in all four regions compared to one year ago, but construction is likely to take place at a more subdued pace until all the bottlenecks ease.

There is some good news. Lumber prices have tumbled 40% from a record peak in May, for example. Yet some of the barriers to construction, such as a shortage of skilled labor, have existed for years and are likely to be a chronic problem.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

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AND HERE'S YOUR MONDAY MORNING COFFEE!!