1 minute readThe second-day lead
The great
From a series of spotlight insights from its latest Housing Trends Report, the National Association of Home Builders just this week noted that soaring prices in the 3rd quarter of 2021 began discouraging a “segment of potential buyers.”
Why it matters
Here’s where the dots connect.
You’re already starting to hear from among the real estate advisors and housing affordability advocates being called into Senate Banking hearings, that they’re calling out homebuilders who are selling entry-level style new homes to private equity-backed build-to-rent portfolio companies, getting full retail prices for those homes, and driving prices higher for each new-phase release of new homes,” says our real estate and construction executive source. “Retail buyers – the owner-occupier buyer – used to be at the top of the totem pole of homebuilders’ best buyer group, but what’s happening is that alternative, non-traditional buyer channel players have moved owner-occupier buyers down the totem pole. You start to wonder whether that ‘attainable’ working-household owner-occupier buyer is an endangered species.”
Which is why the scrutiny, both at the Capitol Hill level and on Main Street, is likely to get more, not less, intense as prices ladder up, interest rate increases upset the monthly-payment equation, and market dynamics kick into an even higher gear.
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