June 19th, 2024

Home builders have hopes for a strong spring

By Alejandra Pulido-Guzman - Lethbridge Herald on February 8, 2023.

Herald photo by Alejandra Pulido-Guzman A construction crew member works on a house being built in the Country Meadows subdivision Tuesday on the city's westside.

LETHBRIDGE HERALDapulido@lethbridgeherald.com

The Canadian Home Builders Association (CHBA) has released the fourth quarter Housing Market Index (HMI) for both the single-family and the multi-family markets in Canada.

Executive officer of BILD Lethbridge, Bridget Mearns said one of the things they have been asking is how builders are feeling, and what they have been seeing with the increasing rise in interest rates, is that people are waiting. They are either not qualifying or they are waiting to see if the interest rates will drop.

“The other thing that they’re facing are escalation costs, so they’re still seeing the costs of just about everything has gone up including labour, the only thing that they’re seeing some stability in is lumber costs,” said Mearns.

 She said they are facing a lot of these headwinds where they are dealing with the interest rates, with consumer confidence being low and also dealing with some escalation in pricing and even still some supply chain issues and some concerns with getting labour.

 “These are all of the things that builders have to manage along with inventory and supply and demand, which is what’s affecting their confidence,” said Mearns.

She said the CHBA report is done at the national level, and sometimes more geared towards bigger urban centres than Lethbridge. So while some areas of the country have been affected more than Lethbridge and builder confidence is low, here the market is different and therefore the confidence of the builders is not as affected as those in other areas of the country.

“We have such a strong agricultural economy; things are a little bit different here so we’re hoping for a good spring,” said Mearns.

 She said the interest rate is affecting starts in the way that some families are getting into the multi-family house market instead of single-family detached homes due to interest rates which is making prices higher than they can afford.

 “Multi-family housing seems to be getting an uptick while single family has leveled off or even decreased, and that could be a matter of demand, but that can also mean there’s enough in the inventory to meet the current demand,” said Mearns.

She said the future is not all bleak, as she have heard from builders that the foot traffic in their show homes have increased and that gives them hope for a good spring.

“There is definitely activity in the market, and we’ve got people coming to our city, so there’s optimism in that we’re starting to see more traffic in their show homes and some interest again. So as consumer confidence starts to build, that’ll affect how builders feel about the industry,” said Mearns.

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home building and nature wrecking…quite a fine that has been crossed far too much for far too long