In an interview with The Associated Press, CEO of Arizona-based home builder Taylor Morrison Sheryl Palmer talks about housing and current headwinds facing new construction projects.
When asked what she makes of the overall housing outlook for 2019, Palmer says "spring is going to be critical" when gauging demand for the year, particularly after the "psychological impact" of rates crossing the 5 percent threshold in fall 2018, ABC News reports.
In terms of construction-side concerns, Palmer says that the labor shortage due to the "aging out of America, immigration changes, and the lack of vocational programs" in education over the past decade mean that this is a problem that "won't solve itself overnight." Could expanded adoption of prefab construction help? Palmer says that while a lot of builders are working on the margins of such a process, the labor issue remains, In some respects, it moves labor from the field to the plants. But you still have to construct the walls." Taylor Morrison builds homes in California, Texas, Illinois, Florida, and 5 other states.
Home builders are ramping up for the looming spring homebuying season, which begins in late February and sets the pace for residential construction activity for the year. Higher mortgage rates last year drove up borrowing costs, stretching the limits of affordability for many would-be buyers. Sales of new U.S. homes declined 12 percent in the first 10 months of 2018 from a year earlier. Now mortgage rates are falling, reaching their lowest levels in nine months, driving home loan applications sharply higher.