New house construction is booming. Here’s why most of it isn’t affordable
- Marketplace
- Jul 26, 2023
- 1 min read
There are more new homes being built in this country right now than there have been in a while.
Housing starts grew by more than 21% from April to May, according to the U.S. Census Bureau. And they’re up almost 6% over this time last year. The number of new homes that were just completed also jumped last month.
But much of what’s being built these days is more high-end housing, including larger homes and luxury apartments.
Building a new house has never been more expensive. At least that’s how it seems to Clint Mitchell, who owns a building company in Indianapolis.
“First, it was land prices, and then post-COVID, there’s been inflation of all kinds of materials and labor to build a house” he said.
A lot of local governments also have strict zoning laws and regulatory barriers that make it hard for developers to build, especially lower-cost, high-density housing, according to Chris Herbert, managing director at the Joint Center for Housing Studies at Harvard University.
“If we have more communities that allow for more multifamily housing, more townhouses, more small single-family houses on small lots, then I think we will see more of that housing get built,” he said.
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