The Expert Podcast

• The common belief: Building more homes will solve the housing crisis.
• Reality: Homes are not being built fast enough due to various challenges.

• Permit & Approval Delays – Lengthy government processes hinder quick construction.
• High Interest Rates – Homebuyers hesitate due to expensive mortgage rates.
• Increased Construction Costs – Inflation has raised material and labor expenses.
• Shortage of Skilled Workers – Finding quality subcontractors is more difficult.
• Profitability Challenges for Builders –
  • Example: A $460,000 home can result in only a $30,000 profit after expenses.
  • Builders must complete 8-10 homes a year to make a sustainable income.
• Shifting Trends: Renovation Over New Construction
  • Many homeowners choose to renovate instead of buying a new home due to:
    • High relocation costs (commission fees, moving expenses, new furnishings).
    • Tax implications of moving to a new property.
    • Easier permit approvals for renovations.
  • Builders prefer renovations as they are lower risk and still profitable.
• The Downside: Housing Supply Issue Remains
  • Renovations do not add new housing units to the market.
  • The U.S. is short by 5 million homes, leaving many in temporary housing situations.
  • More single-family homes are needed to create space in apartments and rentals.
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