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The low-priced home shortage continues

Contractors work on the frame of a home under construction at the D.R. Horton Express Homes Magma Ranch housing development in Florence, Arizona.   The nationwide housing shortage continues but is especially troublesome for homebuyers with a budget of $250,000 or less, Susan Wachter, professor of real estate and of finance at the Wharton School of Business at the University of Pennsylvania, told CNBC on Monday. Rising labor, land and material costs are slowing down the supply, "except at higher prices, which is simply not affordable for the great middle, and that’s where we see the hit in ... existing sales," Wachter said on " Power Lunch ." Sales of existing homes are down for the third month in a row due to a shortage of properties, which results in higher prices and pushes some potential buyers out of the market. Existing home sales fell 0.6 percent in June, or 2.2 percent from June 2017. And as prices for new home construction increase, construction in general is on the decline. Housing starts, or the number of new residential housing projects, decreased in June , plunging 12.3 percent. The loss represents the third month in a row of declines or a nine-month low. "That sets a price point for the existing sale market as well," Wachter said. And with inventory at historic lows and a lack of new construction, existing homeowners are holding on to their homes longer, Wachter noted. That spells trouble for first-time homebuyers and those looking to upgrade, such as growing families. Caitlin O'Hara | Bloomberg | Getty Images Contractors work on the frame of a home under construction at the D.R.

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