Lately, huge demand and low supply of homes have defined the real estate market. Low mortgage rates, high employment and continuing steady job growth means many Americans want to buy homes. While this kind of business in real estate is positive, supply of single-family homes needs to catch up. Builders have been facing problems with shortage of space, labor, and slim access to loans. However, according to the National Association of Homebuilders, a homebuilding increase is coming and supply of homes will increase.
“Builders remain cautiously optimistic about market conditions,” says Robert Dietz, chief economist of the National Association of Home Builders, in a Spring Construction Forecast Webinar on Thursday. “2016 should be the first year since the Great Recession in which the growth rate for single-family production exceeds that of multifamily. And we see single-family growth accelerating in 2017 as the supply side chain mends and we can expand production.”
The NAHB predict that production of single-family homes will increase 14 percent this year to 812,000. Starts of single-family homes should reach more normal levels by the fourth quarter of this year, and increase further by the end of 2017. Then, the top 20 percent of largest states will have reached at least 102 percent of normal single-family home production in comparison to the bottom 20 percent, NAHB says.
“Consumer surveys suggest the ultimate goal of millennials is to purchase a single-family home in the suburbs,” says Dietz. “We see growth for single-family looking ahead. The recovery continues and is dictated by demand side conditions and supply side headwinds.”
It is great news for the real estate market that there is a homebuilding increase coming. This will counteract the recent increases in home prices as well once supply and demand balance out. If you are interested in either a new or existing single-family home in Miami, look no further than our properties at RE/MAX Paradise!