The real estate market right now is tight on supply of homes. One of the major homebuyer concerns lately is about slow construction. Last month, new-home construction dipped below the average from the year prior by 3.8 percent, according to the U.S. Department of Commerce’s monthly new residential construction report.
However, in the big picture, slow construction shouldn’t be a concern as a homebuyer. Overall this year, construction is expected to pick up significantly. January’s construction was up 1,080,000 from a year earlier.
“This will be another year of growth in new building construction,” predicts Jonathan Smoke, chief economist of realtor.com® in an article on the website. The slight drop in home construction that we see is based on data that isn’t necessarily statistically significant. “There will be more opportunities to buy new homes.”
The annual rates of housing permits also went up last month to 1,202,000. Housing permits signify that building will start soon. Smoke also says that some regions of the United States have trouble with construction because of lack of land or pricier construction- slow construction in some areas does not mean its a national problem.
Builders’ confidence fell along with national construction rates, but that coincides with consumer concerns.
“It’s probably due to builders reacting to consumer worries about the state of the overall economy [and the stock market],” says Robert Dietz, an economist at the National Association of Home Builders, a trade group.
“It’s a temporary period of weakness,” Dietz says of builder confidence.“We’ve got growing demand for rental apartments and pent-up demand from home buyers due to low inventories.”
In conclusion, there’s no reason a bout of slow construction should be a cause for concern if you are a homebuyer. 2016 will see supply picking up and prices going down. Interested in seeing some of the amazing properties under construction in Miami now? Contact us today!