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Shortage of housing inventory
July 11th, 2017 5:30 PM
There is an article about the how to support builders for the purchase loans while the housing inventory is still low. What do we get from this info? Keep or purchase the builder stocks.

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Going into 2017, a pickup in purchase lending was expected to help offset declines in refinance mortgage volume. But a nationwide shortage of housing inventory is stifling the real estate market's full potential.

Homebuilders burned by the housing crisis still aren't producing enough single-family housing to meet demand, as they face challenges like land and labor shortages and rising property taxes.
Annual single-family housing starts totaled more than 1 million in every year from 1983 to 2007 except 1990 and 1991, when builders were affected by the savings and loan crisis. After bottoming out at 430,600 in 2011 — the lowest level on record, dating back to 1959 — single-family starts have recovered somewhat, but still remain below 800,000, according to the Census Bureau.

Mortgage lenders have been hit with a one-two punch as a result: There are fewer transactions, and it's harder to qualify borrowers. That has kept loan volume down.

Single-family lenders may not feel like there's much that they can do about the inventory shortages that limit their purchase-loan prospects, but there is.

One of the most direct actions they can take is to participate in the underserved market for construction financing. Borrowers increasingly want to finance their own custom-built homes, and smaller builders often need financing.

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This article suggests to support construction loans. There is still long way to go. But the shortage will push the house pricing higher


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Posted by Eric Fang on July 11th, 2017 5:30 PMPost a Comment

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