America's 2-decade-long housing shortage needs a fix
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(New Mexico News Connection) New Mexico houses cost less to buy than in many other states but there's also less inventory and one data expert does not expect a building boom to return.
Ali Wolf, chief economist for the data and consulting firm Zonda, said in the three years leading up to the 2008 Great Recession, homebuilders started about 2 million homes a year. Because the pandemic followed the financial crisis, housing starts never fully rebounded.
© iStock - Jeff Manes
"We are seeing reasonable levels of growth," Wolf explained. "A lot more construction in the Southeast and the Southwest but these regions are really trying to play catch-up with the amount of in-migration that they've seen."
Since 2010, builders nationwide have started about 1 million new homes a year on average, far below the 1.6 million needed to keep up with population growth. Across New Mexico, there is a shortage of rental homesaffordable and available to extremely low-income households with incomes at or below the poverty guideline of 30 percent of the area's median income.
To offer more inventory, Wolf argued builders need to feel comfortable that they can sell a home. At the same time, developers getting vacant lots ready need to feel confident that somebody's going to buy the land. Right now, she said, the number of vacant developed lots is still 40 percent below its pre-Great Recession level.
"The building community is saying, 'We don't want to get over our skis,'" Wolf observed. "I think that we will continue to see growth in housing starts. I just don't think we're going to see housing starts look anything similar to what we had seen before the great financial crisis."
Federal housing assistance used to focus on poverty, which helped New Mexico families where immigrants make up slightly more than 11 percent of the labor force. Now it is also a middle-class support program. If elected, Democratic presidential nominee Kamala Harris has promised financial assistance for both first-time homebuyers and developers who build their housing.
