PHOENIX — New homebuilders in Arizona are still waiting for their piece of the economic recovery, an economist said.

“Housing has been much slower to recover than expected,” Lee McPheters, a research professor of economics at Arizona State University’s W.P. Carey School of Business.

Despite projections showing Arizona to be one of the top states for both job and population growth, not to mention the city being ranked as the hottest real estate market for 2017, McPheters said the state is running about half-speed when it comes to new homebuilding.

“It’s not going to be a 50,000 single-family permit year,” he said. “We’re expecting something under 30,000 single-family permits.”

McPheters said there are several factors leading to the drop in demand for newly-built homes, including a larger portion of the millennial generation living with family and supply constraints.

“Labor costs are up, labor is less available,” he said. “Land and lot costs are up, regulations are affecting lot development.”

He also cited lower affordable home prices and tight lending restrictions as an obstacle for buyers looking to move into a new build.

“We still have many people that have credit problems from foreclosures [and/or] student debt,” he said.

However, McPheters feels the coming year will bring better news for the industry.

“Overall, I think that what we’re going to see is 2017 is better than 2016 in almost every indicator we have,” he said

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