The lack of new supply has become the housing market’s “chokepoint,” driving costs of living higher, and should be at the forefront of the 2020 election debates, said Lawrence Yun, chief economist of the National Association of Realtors.
Instead, there has barely been a mention, except for former Democratic presidential candidate Julian Castro making an issue about housing not being an issue. Castro dropped out of the race on Jan. 2 and endorsed Elizabeth Warren.
The number of single-family homes for sale dropped to 1.45 million in November, the lowest level for that month in a data series that goes back to 1982, Yun said. The U.S. has added 96.5 million people in the intervening years.
The next chance to see the housing shortage discussed at a debate is Tuesday night at Drake University in Des Moines, Iowa. Six candidates will be on stage: Former Vice President Joe Biden, former South Bend, Indiana, Mayor Pete Buttigieg, Sen. Amy Klobuchar (D-MN), Sen. Bernie Sanders (I-VT), Sen. Elizabeth Warren (D-MA), and billionaire Tom Steyer.
“We have an acute housing shortage,” Yun said in an interview. “Consequently, people’s rents and home prices are rising faster than income growth, and have been for years. This issue should be at the forefront of election debates.”
Some candidates, such as Warren and Sanders, have proposed plans to make public colleges and universities free. Yun suggested candidates look into ways to boost employment in construction.
“No one has discussed ideas for making training in the construction industries free,” Yun said. “There’s an acute shortage of workers, and the cost would be much less than college tuition.”
One of the reasons the construction industry hasn’t returned to pre-crash levels is a shortage of available workers. Immigrant labor has long been a mainstay of the construction industry, and the current immigration policies have worsened the shortage.
About 62% of construction firms reported few or no qualified applicants for open positions and 46% cited the shortage of qualified labor as their top business problem, a National Federation of Independent Business report said on Thursday.
“The inability to assemble work teams is a key contributor to the comparably lackluster performance of the construction industry,” NFIB Chief Economist Bill Dunkelberg said.