Politicians are promising housing help. Homebuilders say the problems are many and the solutions scant.
In the suburbs of Wichita, Kansas, local homebuilder Carl Harris used to charge homebuyers around $330,000 for one of his new-construction homes aimed at growing families.
In the suburbs of Wichita, Kansas, local homebuilder Carl Harris used to charge homebuyers around $330,000 for one of his new-construction homes aimed at growing families. Now, he’s selling that same house for $450,000 — putting it out of reach for the typical household there.
“The payment on that home two and a half years ago was about $1,700. Today, it is just over $3,000,” said Harris, who also serves as chair of the National Association of Home Builders. “That continues to lock a number of people out of the market, and that’s where the true concern is.”
The additional $120,000 added to the price tag of his homes isn’t going into his pocket, he says — he’s making the same 6.5% profit margin — but rather to cover the higher costs of building materials, labor and land, which have increased by double digits over the past three years.
Homebuilders across the country echo his frustrations as they have struggled to keep up with the growing demand for more affordable housing amid rising costs, a shortage of workers and increasing building restrictions from local, state and federal governments. Those factors, along with the lingering effects of the subprime mortgage crisis, have limited the number of new homes they say they can build, creating a supply and demand imbalance that has driven prices higher across the housing market.
“From a homebuilder’s perspective, if we could build more houses in more places at more attainable prices, we would be doing it in a heartbeat,” said Mike Forsum, president and chief operating officer of Landsea Homes, which sold around 700 homes nationwide in the second quarter. “I don’t think people realize and appreciate how many factors are involved in doing what we do.”
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