New Housing Construction Is on the Rise Despite the Shortage of Materials

 The U.S. Census December 2021 Monthly New Residential Construction report revealed an increase in the number of housing starts in November. The rate was 12% over what October's report showed. This trend stems from the strong demand for housing.

“And there’s a lack of existing homes for sale. So where is the buyer to go but to the new-construction market? So that’s the good news,” Susan Wachter, professor of real estate at the Wharton School of the University of Pennsylvania said.

The Survey of Construction (SOC) is a report created by the U.S. Census Bureau and is released on a monthly rotation. The report shows the statistics on starts and completions of both new single-family and multifamily houses. The source of the data comes from survey questionnaires and is broken into two parts, the Survey Use of Permits (SUP and the Non-Permit Survey (NP).

Even with the shortage of building materials, new home contractors are still busy. According to builder Jerry Konter from Savannah, Georgia windows have had a 28-week delay. Housing contractors are finding a workaround for t
he shortage of workers and materials.

“Construction employment has been increasing in spite of all those help wanted signs, and materials are eventually getting delivered,” said economist Ken Simonson with the Associated General Contractors of America.

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March 2021 Sees Gains for Private Residential Spending According to the National Association of Home Builders

 

The NAHB analysis of Census Construction Spending data revealed that March 2021 saw an increase of total private residential construction spending by 1.7% to a seasonally adjusted annual rate of $725.3 billion. This is 23.3% higher than reported this time in 2020.

Along with the pandemic’s stay-at-home orders, homeowners put remodeling and improvements on the forefront. The gains seen in March were mostly attributed to a large amount of spending on single-family and improvements. Single-family construction spending rose to a $389.9 billion annual pace in March, up by 2%. The report also showed a 2% increase in single-family home remodeling.

This spending increase runs along with the single-family housing starts which also jumped in March. According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts increased 19.4% percent to a seasonally adjusted annual rate of 1.74 million units. They have not seen such a fast pace since June 2006.

Housing starts are also on the rise with 636,000 single-family homes currently under construction which is 19% higher than this time last year. NAHB reported that combined housing in the Midwest 28%, the Northeast 23%, in the South 10% and 5% in the West. Permits were higher in the Midwest and South, lower in the Northeast and the same in the West.

Now is a good time to purchase a new home. If you are in the market for a home, go through a local sales agent who knows the market in your area.

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