Ivy Zelman, the executive vice president of Ivy Zelman and Associates, was recently a guest on CNBC’s “Squawk Box”. She addressed issues of immediate concern in the housing market during her testimony. During her morning segment, she brought some terrific context to bear on the new April housing starts data. She further assessed the holistic health of the housing market and addressed the mounting national pressures on housing affordability.
Zelman started by taking a close look at the April housing starts numbers, talking about what it means for the overall market. She pointed out that these numbers are an indication of ongoing, real-world struggles for homebuilders and homebuyers at the same time. That data confirms what we’re seeing in the market — a slowdown in new construction. Zelman points to rising costs and general economic uncertainty, causing many builders to pull back from new projects.
In her breakout, Zelman made the case that it’s critical to know these trends, particularly regarding housing supply. Nonetheless, she noted that demand for homes is still “very solid.” Builders still aren’t able to catch up, which, because of myriad economic pressures, have left many builders unable to build on a large enough scale, leaving a highly constrained market. This predicament has resulted in ultra-competitive bidding wars for any properties on the market, skyrocketing the affordability crisis among potential buyers.
Zelman took a deeper look at the issue of housing affordability, underlining its worsening effect on the stressed state of the housing market. She said the current market is presenting huge obstacles to the majority of prospective buyers as they deal with challenging prices and higher interest rates. Her observations show that all three of these factors are increasingly driving first-time buyers out of the market. These inequitable policies and practices contribute to a growing chasm in homeownership rates.
During her time on CNBC’s “Squawk Box” this past week, Zelman gave a real, touching, and honest look into the born-again housing picture. She called on audience members to focus on macroeconomic trends. Localized trends deserve equal, if not greater focus, as they will more profoundly shape where the future of the housing sector goes.