Due To Increased Demand, Home Builders Ramp Up Construction

If you’re thinking about buying a house, there’s no better time than now. You have a terrific opportunity to obtain more homes for your money with today’s low mortgage rates. Inventory is the problem. Many buyers, like you, want to take advantage of these market conditions, which is leading to increased buyer competition and bidding wars.

If you’re having trouble finding a home to buy, chat with your trusted real estate expert about purchasing a newly constructed home. Early signs indicate that new-home development is starting to pick up. While new homes will not be able to solve all of the inventory issues, they will provide you with more options while you seek a home. A freshly constructed house may be just what you’re looking for as a buyer — it’s spanking new, and with builder customization possibilities, it’s uniquely yours from the start.

Here’s what industry insiders had to say about the new homes on the market:

Recent data, according to Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), could show increased momentum in new home development. Evangelou refers to the number of new residences started during a specific time period, often known as housing starts in the sector.

Housing starts reached its greatest level since 2006 in March of this year, according to the study, which is a positive indication for the industry. Despite a modest fall in April, Evangelou maintains that the pace of housing development is improving in comparison to previous years:

“…we are currently building 24% more homes than we typically have built in April in the last couple of decades. Thus, housing construction is trending upward with housing starts likely to reach 1.6 million for all of 2021 and rise further to 1.7 million in 2022.”

As fresh data comes in, it only adds to the trend. Housing starts grew even higher in May, according to the latest Monthly New Residential Construction report from the United States Census Bureau, continuing the upward trend (see graph below) and indicating that more new homes are being built.

Another hopeful indicator, according to Robert Dietz, Chief Economist and Senior Vice President of Economics and Housing Policy for the National Association of Home Builders (NAHB):

“It is also worth noting that the number of single-family homes permitted but not started construction continued to increase in May, rising to 142,000 units.”

The fact that single-family home permits are also on the rise is just another hint that more new homes are on the way. It’s crucial to understand that building on these homes doesn’t have to begin before you may buy one. Many new homes are selling before construction even begins, according to the US Census Bureau’s Monthly New Residential Sales report (see graph below):

All of these indicators are positive for the housing supply. Builders will be able to raise their production even more in the months ahead as the recent issues of rising timber prices and diminishing lumber availability continue to improve.

Bottom Line

While the inventory issues we’re dealing with now won’t be rectified overnight, the rise in new-home development means you may have more options than you think. Consult your real estate agent for further information on locating your dream house and discovering freshly constructed homes in your region.