NAHB’s chief economist explains the housing shortage

Homebuilders face a long timeline to fill homes the housing shortage in the country. But they still have plenty to offer in a tough market.

According to the National Association of Home Builders, the country has a housing shortage of about 1.5 million. The lack of inventory is the result of what NAHB Senior Vice President and Chief Economist Rob Dietz describes as the five “L’s,” factors that emerged after the last housing crisis.

“It took us about a decade to get into this housing shortage, and it will probably take another decade to get out of it,” Dietz said.

Today high rates have created a ‘lock-in’ effect on the existing housing stock, and builders have stepped in to meet demand. According to the NAHB, one-third of the current market inventory is new construction, and builders are developing smaller, more competitive properties whose sales incentives are expected to persist as long as rates remain high.

National Mortgage News spoke with Dietz about the timeline to resolve the inventory shortage, how new homes compare to existing inventory, and industry sectors to watch.

This interview has been edited for length and clarity.