Summit Addresses Housing’s Headwinds
The Dallas BA’s first State of the Industry Summit examined some of the significant challenges facing the housing industry in 2021. The virtual event, presented by Hotchkiss Insurance Agency, saw more than 100 members log in to hear from NAHB Chief Economist Dr. Rob Dietz, Texas A&M Real Estate Center Chief Economist Dr. Jim Gaines and Foxworth-Galbraith Vice President David Yessian.
High demand and struggling supply was a central theme from all speakers. Dr. Dietz reported that 96% of builders surveyed were experiencing shortages or delays in obtaining building materials. David Yessian shared slides showing the price trends for various dimensions of lumber that were far into uncharted territory.
Yessian confirmed fears that there will not be a quick fix to the situation, with high prices likely lingering into the third quarter of the year. Dietz and Dallas BA Executive Officer Phil Crone discussed ongoing advocacy efforts to address the lumber supply crisis and secure a long term trade deal with Canada. Each hopes to bring more immediate relief.
Dr. Gaines contributed a localized look at the housing affordability issue. He illustrated how median home prices have risen sharply in all of the state’s metro areas. Most significantly in Austin, where median prices now exceed $165 per square foot.
According to Gaines, the region’s job market recovered significantly over the summer, but has since stalled due to increased COVID-19 cases and the recent winter storm. On the employment subject, Dr. Dietz shared that, unlike previous recessions, women have been most significantly impacted by this one due to school closures, which still have nearly half of the nation’s children confined to remote learning. He emphasized that reopening schools will play a key role in recovering lost jobs.
In spite of increasing pressures on young families, millennials, aged 26-40, represent more than 40% of all new home buyers thanks to higher savings rates among that age group. However, both Dr. Dietz and Dr. Gaines expressed concern that inflationary pressures may push rates higher in 2021.
All told, the theme for the rest of the year will be strong demand pushing against constrained supply that will hopefully improve as the nation emerges from the acute phase of the health crisis. To access the on-demand video including presentation slides shared during the Summit click here.