Home builders are seeing unprecedented demand for new homes as existing home listings are minimal and consumer interests are shifting. One of the country’s largest home construction companies, KB Home, reported a net order increase of 27% compared to 2019, according to MarketWatch. President and CEO Jeffrey Mezger tells MarketWatch that, nationally, there is a three month supply of homes, yet in some of the markets KB Homes operates in, supply is down to one month. The accelerated housing demand comes from a combination of apprehensive sellers, aging generations, and historically low home supply, Mezger says.
MarketWatch: Some economists have expressed concerns that the rebound in the labor market has slowed — does that color your outlook for the housing market?
Mezger: I think in our view, you’ll see this strong demand run for a while, because of all those dynamics. People go ‘Well, there’s 20 million people unemployed these days.’ And as we’ve looked at the unemployment side of things today, most of the unemployed are at income levels below what our home buyers are at. And those people that have a job today and have good incomes are compelled to be a homeowner. So you have everything aligned for an incredible run on new home sales right now.
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