There have been a number of variables holding builders back from constructing new homes in recent years, but experts now say a lack of desirable land could be a new obstacle.
At the housing market's peak, hundreds of thousands of lots in locations far from metropolitan areas were fitted with roads, sidewalks, electricity sources and sewage systems with the plan that homes would one day fill these vacant spaces, according to a report from the Wall Street Journal. But as conditions stabilize and prospective buyers start to consider making the transition to homeownership, many of them would prefer to be closer to economic centers.
"A lot of the demand during the boom was speculative demand, not real user demand, and speculative demand was blind to location," Metrostudy chief economist Brad Hunter told the newspaper.
Nowadays, factors such as rising fuel prices which impact commutes and reputable school districts continue to weigh heavily on the choices buyers make when selecting where they want to live. However, there is little land left in the suburbs just outside of major cities to develop, and this could have a negative effect on the home construction rate in the near future.