New housing market improves, but builders say financing still difficult
New home sales rose slightly across the nation and in Michigan this year. But one industry group says lenders are still keeping a tight grip on their money.
More than 7,000 new homes will be built in Michigan this year, but that’s still far below construction numbers from just a decade ago.
Michigan Association of Home Builders CEO Bob Filka says more than 25,000 homes were built every year in Michigan before the housing bubble and the economy collapsed.
Filka says the buyers are there, but the banks are still reluctant to finance.
"Michigan is poised to move forward, but it's being held back because, quite frankly, regulators have really squeezed banks hard in this state -- and unrightfully so," Filka says.
Filka believes banks are getting negative signals from the government.
"Federal regulators at the FDIC level have told lenders around Michigan that they need to look at another devaluation in real estate in Michigan in the double-digit range," he says.
Filka says most of the new homes built in Michigan are smaller, and cost under $200,000.
He says Ann Arbor and Muskegon made a national list of most-improved new housing markets this year. Both cities had six straight months of increases in home values, job growth and building permits.
Filka says there are concerns a labor shortage will increase the cost of new housing because many builders, subcontractors and construction workers have left the state.