The US housing market is seeing a surge in new construction projects as the economy continues to recover from the COVID-19 pandemic. New home construction jumped 11.1% year-over-year in April 2021, according to the US Census Bureau. This is the highest increase in new home construction since January 2006.
Home builders are confidence that the housing market is experiencing a strong recovery, considering the demand for newly constructed homes is driving the surge. The cost of building materials, such as lumber, continue to be a challenge. But, despite the cost, builders are investing in projects, believing they’re on track for a strong recovery.
The increased new construction brings new hope to the housing market. The number of houses available for sale is still far lower than usual, and new construction can help to ease the current inventory shortage. According to the National Association of Realtors, the supply of existing homes for sale was down 32.2% from the same period last year in April 2021. With fewer existing homes and more people looking to move, this new construction could help to keep the housing market moving in the right direction.
The population of people looking to buy a home has increased significantly, especially among younger generations. Millennials are now the largest home-buying generation and are driving the increased demand for housing. This younger generation is looking for more spacious homes for their growing families and the increasing cost of rent have many turning to homebuying as an option.
As homebuilders invest in projects and the housing market experiences higher demand, it’s likely that the new home construction jump will help with the current housing market issues. It could give potential homebuyers more options and with the increased supply, be able to find a place that meets their needs.
The rise in new home construction is a welcomed sight for many in the real estate market. With more construction projects in the works, it could help with the current inventory shortage and keep the housing market from suffering in the long run.