The director of North Dakota’s Housing Finance Agency said there appears to be a shortage of home builders who are willing to build single-family homes at the price point that’s affordable for first-time homebuyers.
"What we're hearing is that if the typical buyer is looking for a $450,000 house, that's what they're building," said HFA director Jolene Kline. "There's less profit in the lower, entry level homes, and they're not willing to target that market today."
Kline said the search is now on for builders willing to take on the more modest priced homes.
"The average loan amount for the low-to-moderate income buyers is about $165,000," Kline said. "There's no way those borrowers can afford a $350,000 house."
Kline said that problem is more acute in the oil patch.
"Part of it is, there are not as many builders up there," Kline said. "And part of it is the escalation of prices for existing homes, and those homes aren't being freed up for the entry-level borrower."
Meanwhile, Kline said the state's "First Time Homebuyer" program remains popular. That program aims to offer loans at below market rates.
"The agency strives to deliver loans that are a half-percent to a full percent lower than the conventional marketplace," Kline said. "Part of the reason for the increase is the rising interest rate environment."
The progeram's interest rate right now is around four percent.
The State Housing Finance Agency recently issued $125 million of Home Mortgage Finance Bonds to fund that program. A similar amount was issued back in April.