Builders Are Pulling Back-Even With a Housing Shortage
Ken McElroy Show
Ken McElroy
4.7 • 712 Ratings
🗓️ 30 January 2026
⏱️ 32 minutes
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Transcript
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| 0:00.0 | Welcome to the Ken McElroy show. Today we're going to be discussing how builders are pulling back even though we have a housing shortage. And we're going to look at some of the hidden costs that are killing ownership. Well, we do have a housing shortage, right? I mean, so why is that? Well, building right now is slowing and it's not accelerating. So you would imagine that, you know, they would be picking up |
| 0:21.5 | steam since we need so many houses. But they're not. Like builders would build if they can. |
| 0:27.0 | Right. I mean, that's their job, right? Like, like, who doesn't want to build? That's the issue. |
| 0:32.9 | It's just the price, construction costs and the interest rates. And you don't build unless somebody can buy. Right. The math has to work. Right, right. And the math is the customer. Yeah. So buildings could build, but the last thing they want to do is sit on inventory. Mm-hmm. Because they learned their lesson in 2008 when they had way too much inventory. And so now I think they're doing it |
| 0:55.0 | more in, you know, sections. Well, you went out to a subdivision last week or a couple weeks ago |
| 1:02.7 | and there's quite a bit of product there, right? There is. There's product and there's incentives, |
| 1:07.1 | but I will tell you that, you know, the incentives were better, November, December. |
| 1:11.5 | They were offering a 4.75 rate. You know, now that rate has gone up to 5%. And they, I'm sorry, |
| 1:21.5 | they were offering a 3.75 rate. And that rate has went up to 4%. And they were only keeping that through the end of |
| 1:30.7 | February. And then they're going to be raising it again. Four percent still really good. That's like |
| 1:34.9 | two point less. And so let's let's let's figure that. If it's a $500,000 home, 2% is a lot. |
| 1:42.6 | Yeah. I think it was about $800 savings for my client and the home was around, |
| 1:47.7 | right? Yep, and it was around, you know, $400 and some thousand dollars. So call that 10 grand, |
| 1:53.1 | right? So somebody's eating that and it's just, it gets baked into the, into the builders |
| 2:00.4 | incentives and their sales costs, right? |
| 2:03.2 | Yeah. |
| 2:03.6 | And but they also are, you know, like I said, the incentives were better and then they're getting |
| 2:08.4 | not as good. |
| 2:09.5 | So you have to keep that in mind. |
| 2:11.1 | When you're looking at that, as a buyer, you have to realize that that means the market |
| 2:15.3 | is picking up. |
| 2:16.1 | That's why they're raising their rates. |
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