By admin 
PHOENIX (AZFamily) — The housing market in Arizona and across the country has been sluggish with mortgage rates around 6.5% and inflation limiting what people can afford.
Read more Vapes among 2,500 pounds of trash pulled from Salt River, raising safety concerns
There is no sign of a turnaround any time soon.
New numbers from the U.S. Department of Housing and Urban Development show new home construction has dropped to its lowest level since the pandemic in 2020, making a tough market for homebuyers even tougher.
Construction declines nationwide
Just last month, new-home builds fell another 8.5% nationwide from this time last year.
Danny Seiden, president of the Arizona Chamber of Commerce, said homebuilders are facing a number of challenges, from the cost of materials, a labor shortage and rising gas prices.
“I think the math has gotten a lot harder for a lot of builders. Rates, materials, labor, land, all of that at once has gone up. We’re dealing with a lot of price hikes and inflationary impacts. I think it’s helped slow this down,” Seiden said.
Unsold inventory reaches 19-year high
Right now there are roughly 500,000 unsold new homes across the country, the highest level in 19 years.
Housing experts say with so much inventory, builders are pulling back to avoid the ongoing costs of maintaining too many unsold homes.
But with fewer homes being built, that can have a ripple effect on the entire housing market.
Read more FACT FINDERS: E-bike accidents on rise in Arizona as riders, drivers navigate traffic laws
Zach Milne, a senior economist with the nonpartisan research firm Common Sense Institute, said reducing the number of homes on the market creates less inventory, which can drive up home prices.
That is not good when the country is still facing an affordable housing crisis.
“It’s an issue across the country, but I think in places like Arizona specifically, it’s particularly bad here. Seeing falling home building across the country and these trends in Arizona certainly concerning for housing affordability here in the state,” Milne said.
Housing experts are hopeful that interest rates will come down later this year, along with gas prices, to stabilize the economy and make it easier and more affordable for people to buy a home.
“The war in Iran seems to be settling down. We should see prices come down. Many goods should come down. Hopefully availability of labor will be addressed as well,” Seiden said.
A number of homebuilders are offering discounts to try and get unsold homes off their books.
See a spelling or grammatical error in our story? Please click here to report it.
Do you have a photo or video of a breaking news story? Send it to us here with a brief description.
Read more ESA voucher enrollment data finds higher participation from high-income zip codes