The Market Demands New Homes

With baby boomers and generation x staying in their homes longer, the responsibility falls to home builders to provide homes for millennials to purchase. Currently builders are under-building, so there is a shortage of available homes on the market for potential buyers.

In the early 2000s, the market experienced a boom in new home construction, but the financial crash forced builders to cut back their production because there was an excess supply of new homes. New home construction remained low for the next few years because of a cautious economy. Since 2012, builders have steadily increased their construction rates. “During this period of economic growth, the pace of housing starts relative to population has improved steadily but at a crawling pace,” according to realtor.com.

In 2020, the demand for new homes has not been met. Realtor.com predicts that it could take around four to five years to reach an equilibrium in supply and demand if builders are aggressive and about a decade if they take a more conservative approach.

It looks like it’s a good time to get in the construction business.

- Ashley Jorgensen

Sources:

https://www.realtor.com/research/homebuilders-big-hill-climb-remain-key-supply-shortage/

Photo by Christopher Burns on Unsplash