Momentum Is Building for New Home Construction
You may be in the market for a new home and are feeling the effects of a limited selection. If your biggest obstacle is finding something you like right now, don’t overlook the option of a newly-built home. . . . The current supply is less than half of what it was in 2019. . . The market for new construction, however, is a bright spot. “Here’s an overview of a key metric which shows how much new home building is increasing across the country. It’s called the new residential completions. The graph below uses Census data to show the trend in new-home completions, including the long term average for the number finished housing units (shown on the graph in black):As can be seen on the left, leading up to housing crash, builders were exceeding that average. Home values dropped due to an oversupply. This was one of the reasons for the housing crash in 2008. Since then, the number of new homes has dropped, and builders are not building enough to meet the historical average. This underbuilding has left the housing market with an inventory deficit that spans several years. This deficit is a big reason why inventory is so low at the moment. But, here’s some good news. According to the latest Census report, builders are currently matching the long-term median. This means that they are bringing more new homes to the market today than in recent years. Residential starts and permits have also gained momentum. Starts are houses where construction has officially begun. Permits are the homes where builders plan to break ground in the near future. It’s a sign that there will be more newly constructed homes soon. If you are looking to move now and the timing is important, contact a local realtor to see what homes have recently been completed in your area. If the construction is complete, you will be able to move into the home quickly. But, if you are willing to wait and want to customize a home, ask the same agent about homes that are currently being built in your area. You can choose the features and finishes of a home while it is still being built. A trusted real estate agent will be a vital part of your search. They will know what is available in your area, and can make recommendations based on your needs, desired neighborhoods and more. Bottom LineIf you are having trouble finding the home you want, it might be time to look into new-home construction. Reach out to a local real estate expert who knows what’s available.
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