With existing home inventory moving faster these days due to record low interest rates, tight supply, and pent-up demand, rectifying the imbalance depends upon new home construction. Fortunately, nationwide indicators show possible relief on the horizon, with December housing starts up 28% year over year signaling the largest gains since 2006, with an annualized 1.67 million homes started for construction. Moreover, per the latest US Census Bureau report, permits for new construction also rose 4.5% in December, compared to November, to an annualized 1.71 million homes.
However, while housing starts and permits are up, developer sentiment may indicate good times for buyers are in no way guaranteed in the short-term because of supply-side headwinds, such as:
- lack of affordable land
- increasing lumber and material costs
- shortage of skilled labor
All told, since new construction homes have been historically underproduced for the past 13 years, a strong new construction boom over the next couple years may be the only path towards balancing the tables between buyers and sellers. Learn more at Boston Agent Magazine’s article below: