National Association of Home Builders (NAHB) CEO Jerry Howard on the latest home builder sentiment numbers and housing affordability in the US.
He said the increase in prices has boosted the price of a new home by tens of thousands of dollars, and builders are having to add escalator clauses to contracts. A recent report from CoreLogic found that home prices were up 10.4% year over year in February, posting their largest increase since 2006 – right before the real estate bubble burst.
The current up move in lumber prices has “mania characteristics,” wrote David Rosenberg, chief economist and strategist at the Toronto-based Rosenberg Research.
He warned prices may not let up anytime soon as they can “stay overbought for lengthy stretches before finally unwinding.”
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Regardless of where prices go from here, homebuilders may not be able to wait much longer to start building.
“A large backlog of homes which have been authorized but not started will support single-family construction this year,” Pointon wrote.
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