The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s U.S. Commerce Department report on Q1 GDP:
“The continuing economic expansion assures further job creations and household formations. However, the latest GDP growth rate (of 2.3%) is short of what is possible. Residential investment spending showed zero growth because single-family and condominium construction have not been growing meaningfully. In America today, there is a major housing crisis. Consumers are facing high rent growth and are having difficulty saving up for down payment because of fast appreciating home prices. The acute housing shortage in most parts of the country can easily be relieved with more construction. Therefore, regulatory relief for small-sized banks will facilitate more construction loans for small-sized homebuilders. Local governments need to balance out how zoning laws may be hindering home construction and thereby unnecessarily raising housing costs for local residents. Also many communities need to focus on providing training in trade skills like carpentry and wood framing. A solid growth in home construction will help boost future GDP growth to consistently run at 3% or higher.”
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