“America’s Two-Decade Housing Crisis: Solutions for the Future”
(New Mexico News Connection) While homes in New Mexico may be more affordable compared to other states, the state is facing a shortage of inventory, and one expert predicts that a building boom is unlikely to return anytime soon.
Ali Wolf, chief economist for the data and consulting firm Zonda, noted that in the three years leading up to the 2008 Great Recession, homebuilders were starting about 2 million homes annually. However, after the pandemic followed the financial crisis, housing starts never fully recovered.
“We are seeing reasonable levels of growth,” said Wolf. “There’s more construction happening in the Southeast and Southwest, but these regions are trying to catch up with the influx of people moving in.”
Since 2010, builders across the country have averaged around 1 million new homes annually, which is far below the 1.6 million homes needed to keep pace with population growth. In New Mexico, there is a significant shortage of affordable rental homes for extremely low-income households—those earning less than 30 percent of the area’s median income.
To increase inventory, Wolf explained that builders need confidence that they can sell the homes they construct. Similarly, developers preparing vacant lots need assurance that the land will sell. Currently, the number of vacant developed lots remains 40 percent below pre-2008 levels.
“The building community is cautious,” Wolf noted. “I think we will see continued growth in housing starts, but nothing on the scale of what we saw before the Great Recession.”
Federal housing assistance has traditionally focused on poverty, benefiting New Mexico families, including immigrants who make up more than 11 percent of the state’s labor force. However, today, these programs also support the middle class. If elected, Democratic vice-presidential nominee Kamala Harris has pledged financial aid for both first-time homebuyers and developers building new housing.
