Latest news with #NationalAssociationofHomeBuilders
Daily Mail
3 days ago
- Business
- Daily Mail
A new law could introduce mortgages for building tiny homes
A new proposed law could make it easier to take on a loan to build a mobile home. Two congressmen have joined forces to present a bill that would create a new government-backed loan for Americans who want to build a tiny home on their property. Mobile homes have become increasingly popular as the rising cost of housing has shut many out of the dream of home ownership. Now existing homeowners want to build tiny homes on their properties - known as accessory dwelling units, or ADUs - to house their adult children, elderly parents or to let out to guests as a way of generating income. Even home builders are including ADUs as a selling point on properties. Sam Liccardo, a Democrat from California and Andrew Garbarino, a New York Republican, are co-leading the ADU bill that would allow for the unique second mortgages. 'This is a really pressing issue for Americans,' Liccardo said of the housing crisis. 'But it has not become nearly pressing enough for Congress,' he told The Wall Street Journal. ADUs are studio-style housing units which are normally between 600 and 1,200 square feet. The bill aims to ease the risk for private lenders to offer second mortgages for ADU construction by providing a government backstop in case the homeowner defaults, according to the Journal. So far the bill has been endorsed by at least 16 Democratic and Republican House members as well as the National Association of Home Builders and other influential industry groups. In 2020 around 1.4 million American homes had a supplemental tiny home on their property, and the trend is only gathering pace. The US is currently short 4 million homes and almost one third of all households are deemed to be 'cost-burdened,' because they spend more than a third of their income on rent or mortgage payments, the Journal reported. The housing crisis is increasingly encroaching onto politics and lawmakers are taking note. California Governor Gavin Newsom recently rolled back a landmark environmental law in a bid to boost house building. Lawmakers are also warming up to the idea that tiny homes could be a way to ease the housing crisis as they can be erected quicker and more cheaply, and often encounter less red tape than traditional full-size properties. Republican Andrew Garbarino (pictured) has worked with Democrat Liccardo to present the bill 'This happened to be a lower-hanging fruit,' Liccardo explained. 'It helps to start in an area where you can actually get something done.' For that reason modular home builders have targeted victims of the Los Angeles fires with offers of cheaper and quicker rebuilding options. Many homeowners who saw their properties burned to the ground were then met with the compounding heartbreak of home insurance payouts that will only cover a fraction of the rebuilding costs. Now businesses such as ICON and Hapi Homes see an opening to the mass market their tiny homes, which are built off-site with the help of 3-D printers and then transported to their final location. Building new homes off-site is often much cheaper because materials can be purchased in bulk and fewer workers are required for less time. After wildfires devastated Maui, Hawaii, in 2023 more than 100 modular companies flooded the building market.
Economic Times
4 days ago
- Business
- Economic Times
US staring at another 2008-like housing bubble crash? Trends show rising housing and rental crisis
Reuters Builders and sellers outpacing available buyers in South and West The American housing market is flashing serious warning signs. With mortgage rates climbing, home prices cooling in key metro areas, and rental housing out of reach for millions, real estate experts and analysts are drawing unsettling parallels to the catastrophic 2008 subprime mortgage today's market is fundamentally different, the growing affordability crunch, inventory glut, and stress on homeowners could lead to severe consequences if left unchecked. According to July 12, 2025 Weekly Housing Trends Report, homes in several metropolitan areas are sitting longer on the market. Miami has become one of the slowest housing markets in the U.S. with a median 83 days on market, more than double the time compared to the same period last year. Other cities like Orlando, Tampa, and New Orleans are also witnessing a steep decline in sales pace. What's most telling is the sharp year-over-year inventory rise in pandemic-fueled boomtowns, with builders and sellers outpacing available affordability is at a generational low. Mortgage rates, which were around 2.99% in mid-2021, are now hovering around 6.82% as of July 2025. Pair this with home prices that have surged by over 45% since 2020, and it's no surprise that many first-time buyers are locked out of the market. The number of new home sales fell to a three-decade low this spring, while pending home cancellations hit a record 15% just in May, according to clear signal of rising buyer hesitation and financial strain. As home prices have continued to rise—the average U.S. home now costing $355,328, up 2.7% in just one year. Data from the National Association of Home Builders shows that only 43% of U.S. households can now afford a $300,000 home, leaving nearly 76.4 million households priced out. The crisis isn't just in homeownership. A recent in-depth report by The Daily Upside highlights a more severe shortage on the rental side. The U.S. now faces a shortfall of over 7.1 million affordable rental units. Only 35 units are available for every 100 extremely low-income renter households, forcing a staggering 75% of these renters to spend more than half of their income on rent. This housing stress is contributing directly to America's growing homelessness problem, which saw its biggest spike last year since the Great further complexity is the over-supply in some markets and under-building in others. Pandemic-era construction booms in southern states like Florida and Texas have now turned into oversupply risks, while urban centers continue to face huge housing deficits. Housing starts have dropped 10% year-over-year, and builder sentiment is at its lowest since even point to speculative behavior in tech-driven areas, citing factors like investor hype and erratic crypto wealth—fueled by influencers like Elon Musk and the Dogecoin trend—as distorting local housing markets during 2021–2022. Now, many of those same areas are suffering steep corrections, mirroring the fallout from tech-centric housing markets during the 2008 2008 financial crisis started when banks gave risky home loans to people with poor credit—known as 'subprime borrowers.' These loans were packaged into complicated financial products and sold to investors around the world. When people started defaulting on their mortgages, the value of those investments crashed. This led to a wave of foreclosures, bank failures, and a global financial meltdown. Millions of people lost their homes, and the U.S. went into the worst economic downturn since the Great experts agree the lending standards today are stronger than they were in 2006–08, which could prevent a full-scale housing market collapse. However, the 'slow squeeze' of high costs, stagnating wages, and frozen market activity could trigger deep pain for specific regional economies. The cocktail of delayed home purchases, rising multi-generational housing, unaffordable rents, and increased mortgage stress could easily spill over into broader financial national housing data continues to trend downward and rental shortages grow more severe, policymakers and investors alike are watching closely.
CNBC
17-07-2025
- Business
- CNBC
Homebuilders are slashing prices at the highest rate in 3 years
The nation's homebuilders continue to see weakening demand from potential buyers concerned about the broader economy. As a result, they are cutting prices at the highest rate in three years, according to the monthly builder confidence survey from the National Association of Home Builders. Builder confidence in July rose 1 point to 33 on the NAHB index, a slight improvement. Still, anything below 50 is considered negative sentiment. The index stood at 41 last July, and it has been in negative territory now for 15 straight months. The slight boost this month came from the recently passed budget act, which provided some tax relief for households, home builders and small businesses. Mortgage rates, however, have been hovering in the same narrow, elevated level for several months. "While this new law should provide economic momentum after a disappointing spring, the housing sector has weakened in 2025 due to poor affordability conditions, particularly from elevated interest rates," said Buddy Hughes, NAHB chairman and a builder from Lexington, North Carolina. That's why 38% of builders said they cut prices in July, the highest share since NAHB began tracking the metric in 2022. Just 29% were cutting back in April. The average price reduction was 5% in July, where it has been every month since November. CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. Builders have been buying down mortgage rates to help get buyers in the door, which has cut into their margins some, but not as much as price cuts. "Should the public builders supplement mortgage rate buydowns with more outright price reductions they would likely experience a larger negative gross margin and EPS drag as they would be unlikely able to offset the margin drag with increased volumes and SG&A leverage," said Jonathan Woloshin, real estate and lodging analyst with UBS. Of the index's three components, current sales conditions rose 1 point to 36, sales expectations in the next six months increased 3 points to 43. Buyer traffic saw a 1 point drop to 20, which is the lowest reading since the end of 2022. "Single-family housing starts will post a decline in 2025 due to ongoing housing affordability challenges," said Robert Dietz, NAHB's chief economist. "Single-family permits are down 6% on a year-to-date basis and builder traffic in the HMI is at a more than two-year low." Regionally, builder sentiment was strongest in the Northeast where it rose 1 point, flat in the Midwest and dropped further in the South and West, where it was weakest.
Bloomberg
17-07-2025
- Business
- Bloomberg
US Homebuilder Confidence Edges Up After Budget Bill Passage
Confidence among US homebuilders in July edged up from a more than two-year low, though a growing share of companies are cutting prices to nudge buyers off the sidelines. An index of housing market conditions from the National Association of Home Builders and Wells Fargo improved 1 point to 33 this month, still one of the lowest readings since the end of 2022. The gauge matched the median estimate of economists surveyed by Bloomberg.
Bloomberg
10-07-2025
- Business
- Bloomberg
The Key to More Profitable Home-Building? Cheaper Land
The market for new homes is facing a conundrum. Nationwide, a structural undersupply has fueled the lack of affordability we see just about everywhere. We need to build more. Yet, in the short-term, home prices are falling, particularly in the parts of the country that have seen the most construction, putting pressure on industry profits and leading homebuilders to contemplate production cuts and layoffs. Something has to give. Builders need relief on the cost front to keep breaking ground on new homes if prices are falling. That relief is unlikely to come from construction costs, which last year climbed, on average, to 64.4% of the final price for a typical home from around 56% in 2017, according to National Association of Home Builders' survey data. Land is the other big cost at 13.7% in 2024. With homebuilders set to exhaust the cheap lots they acquired prior to the run-up in land prices, they can't afford to key paying up for land in an environment of sluggish demand and profitability.
