Developers Need To Build For Affordable Markets—US Luxury Markets Are Oversupplied
New-home construction is still weak a decade after the start of the housing bust, largely because today’s developers are building luxury apartments instead of single-family homes.
Many Americans are having a hard time affording their first home. Despite low rates, it’s still tough for many people to qualify for a mortgage, so more people keep renting, the Wall Street Journal reports.
But developers have mostly been building luxury apartments in the nation’s largest cities, and the high end is becoming oversupplied, according to Bank of America economist Michelle Meyer. It’s time for builders to lay off luxury apartments and focus on more affordable markets, where there is huge demand. [WSJ]