Warmer weather coming soon will invite more construction workers to get outside, and according to Fitch Ratings, springtime building is expected to be be busy this year. They wrote that “steady order growth and strong backlogs should support healthy financials for the U.S. homebuilding sector entering the pivotal spring selling season.” This means great things for the future supply of new homes on the market.
What could hurt springtime building?
While the economy is strong and real estate is popular, a few factors could hurt the rate of springtime building. According to Fitch, the weak Chinese economy, volatile financial markets and an adequate, reasonable cost labor supply are possible impediments to the homebuilding sector.
However, “Low oil prices, robust employment growth, pent-up demand and steep rent increases should help support the housing upturn for at least the next six-to-12 months,” says managing director and lead homebuilding analyst Robert Curran. “Additionally, the continued moderate easing in credit standards is enticing more first-time homebuyers to enter the market.”
Last year, housing starts increased. Single-family homes saw their starts expand about 10.8 percent. Multifamily units grew about 11.5 percent. New home sales increased 14.6 percent nationwide, and existing homes also saw an increase, of about 6.5 percent. What does Fitch say about this new year, 2016?
Fitch projects single-family starts to improve 11.5 percent, and multifamily volume to grow around 6 percent. The company also expects sales to increase. Fitch sees new sales increasing 14.5 percent and existing home sales to improve by 4 percent in this coming year.
Florida Realtors says “Fitch expects stable ratings for most issuers within the homebuilding sector during 2016, reflecting a continued, moderate cyclical improvement in overall construction activity. However, there is also potential for a few positive outlooks and/or rating upgrades.”
Seeing predictions of solid springtime building is a good sign for the real estate market as a whole. If you are interested in buying a home freshly built, or are interested in some of our amazing pre-construction plans, contact RE/MAX Paradise today!