Has industry consolidation held back home construction?
from The Wall Street Journal
The housing sector isn’t dragging on the economy anymore and has begun to provide a modest boost. But housing continues to punch below its traditional weight because home construction is a shell of its old self. Economists cite several reasons, from weak household formation that has held back entry-level demand to rising land costs. Both factors have made construction of starter homes in the outer suburbs, where land is cheaper, a riskier proposition. Instead, builders have deemphasized volume and shifted towards selling a smaller number of more expensive homes with big floor plans.
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