In addition to a depleted inventory of affordable homes, rising interest rates could also make home-ownership prohibitive.
Ken Simonson, the chief economist with the Associated General Contractors of America, suggested the demand for homes will decrease as builders pass on higher costs to consumers.
Tariffs placed on building materials like steel, aluminum and lumber by President Donald Trump’s administration have driven up costs for contractors and will hamper single- and multifamily home construction, Simonson said.
As home costs increase, Simonson said he expects demand for rental family housing will pick up while mortgage rates will continue rising “at a gradual and irregular pace that will price more homebuyers out of market,” he said.
“I think we will still see an increase in home construction and multifamily apartment construction in 2019, but it’s likely to be smaller than otherwise because of these factors... driving up costs and adding uncertainty to both cost and delivery,” Simonson said.
But Rocky Ferraro, the former executive director of the Capital District Regional Planning Commission, pointed out that improving housing conditions and affordability has been an ongoing challenge, and government efforts have ranged from the New York State Tenement House Act of 1901, to the Housing of Act of 1949.
He said the goal hasn’t necessarily been met, but “that doesn’t mean you give up,” Ferraro said. “For each affordable house you build, that’s one household that has an occupied unit.”
On the cover
A view of a home on Center View Drive in Troy.