Either interest rates need to drop back down, or building costs will need to come down, that is the only two ways to make homes affordable for young buyers again. Starter homes, in my area, are around $250k. The difference in mortgage payment between 6% and 3.5% is a little over $300/month. That payment eliminates quite a few potential buyers.
Labor and materials are outrageous right now. I'm not sure labor prices will ever go back down. I have no problem with labor being paid what they should, it lets the construction worker have discretionary income that gets churned back into the local economy. But material costs? Those guys have been around long enough that they are still profitable with prices dropping back into 2010-2018 prices. One of the guys that owns part of our small, local, concrete plants is a friend of mine. He lives in a $2 million house on the river, has about two or three $100k trucks, wife has a $120k car. He bought those when concrete was about $110/yard. Concrete went over $200/yard in our area, and is back down to about $175/yard. When construction nearly slows to a halt, concrete, lumber, and roofing materials will have the room to drop prices drastically and still remain profitable. One of the suppliers is going to have to feel enough pressure to break ranks.
Personally, I would like to see both a drop in interest rates and material costs come down as well.
CHIEF