As the number of homes for sale remains near all-time lows and monthly mortgage payments near a record high, building more housing could be one of the best ways to ease the affordability crisis.
According to the latest analysis by real estate company Redfin, Denver cracks the top 15 markets nationally when it comes to building new homes.
In the first quarter of 2022, Denver had 13.2 single-family building permits per 10,000 people.
“If there had been enough homes at the start of the pandemic, housing costs might not have skyrocketed the way they did over the past two years,” says Redfin Chief Economist Daryl Fairweather.
“The government should support homebuilding with things like subsidies and upzoning even as demand pulls back so the housing-supply hole starts to fill in.
“There still aren’t enough homes to meet the pace of household creation, and we need to be more prepared when demand inevitably picks back up.”
Building the right properties
The Denver metro area struggled with an affordable housing shortage before the pandemic. The past two years made the situation worse.
“We have a housing shortage and therefore, with prices rising so fast, it means there is simply not enough inventory for the first-time buyers,” Lawrence Yun, chief economist with the National Association of Realtors, tells Denver7.
Fairweather thinks builders need government subsidies and proper zoning, so they will continue building even as more houses hit the market.
Yun agrees the focus needs to be on building affordable homes.
“So there has to be the affordable housing options, and when we are looking at affordable housing options, these are people in the middle incomes, say, nurses, teachers, firefighters,” he says.
Otherwise, residents who need to be rooted in the community as homeowners can’t afford to buy.
Christina Huber, a professor of economics at the Metropolitan State University of Denver, tells Denver7 that new construction won’t be enough to solve the affordability problem.
“The builders also purposely don’t build the starter homes and the cheaper homes and the cheaper apartments. They are building the luxury apartments and the luxury homes because they are making more money that way,” Huber says.
The news and editorial staffs of The Denver Post had no role in this post’s preparation.