The always entertaining National Association of Home Builders (NAHB) now claim the supply of ready-to-occupy new homes has fallen to a point where it “could become a problem in certain markets and price ranges,” according to National Mortgage News.
NAHB chief economist David Crowe warned the crowd at the group’s annual convention in Las Vegas that the number of new units finished and awaiting buyers is at its lowest point since 1971.
He added that the recession is over, inflation isn’t a concern, and mortgage rates will stay below six percent for the remainder of 2010, making right now the time to buy.
Crowe believes home prices have bottomed and are now at 3.28 times median income, which is close to being in line with long-term stability.
The price-to-income ratio had been 4.7 percent nationally, and as high as 9.2 percent in hard-hit California before home prices began to correct.
Crowe said ten states will be back to 100 percent or more of normal production by year-end, though 10 others, including California, Nevada, Arizona, Florida, will remain below 70 percent of normal building production.
That’s a relief, because after driving around the many vacant and half-built residential housing tracts in California, it’d be pretty scary to see more homes being erected.