So far, 2016 has been a great year for the construction industry. That’s because new homes have been in demand, as was the case last year, as well. Though this is generally good news, especially for anyone working in the construction industry, there are some possible downsides to this pattern. Check out what’s been happening in the construction trade this year and what it means for most people.
Construction Stats for 2016
The experts who are keeping an eye on the construction field recently reported that construction of single-family homes increased by 7.2 percent in February. And compared to February of 2015, new home construction has experienced a 30.9 percent increase. Nationwide, builders started construction on more than 1,175,000 brand new homes in February. The West, in particular, is having a great year when it comes to construction, since this activity is up 26.1 percent there. The Midwest is next, with a 19.9 percent increase in construction, while the South has seen a 7.1 percent increase.
The only area of the United States that has experienced a downturn in new home construction is the Northeast, as it has decreased by a staggering 51.3 percent, likely because there is a lot less open land to build on. In addition, the construction of apartment buildings has not been rising nearly as fast as single-family homes, since it’s increased by a mere 0.8 percent. But the slower growth of demand for apartment buildings is a symptom of the sudden popularity of single-family homes, meaning that more people are simply moving out of apartments in favor of new houses.
The Effects of the Increased Demand for Construction
In general, a booming construction industry is a good sign for the country. It signifies that more people are buying homes, largely because more people are employed and have the money to buy rather than rent. In turn, there are more job openings that need to be filled in the construction, real estate, and insurance industries. After all, someone needs to build, sell, and insure these new homes, and experts in these fields are more than happy to do the job.
However, it appears that the construction industry wasn’t quite ready for the sudden increase in business. This is made clear by the fact that there’s a lack of framers and other skilled construction workers, which makes the wait for a new home longer than usual. While it used to take three to six months to build a home, some areas are experiencing such a demand for new homes that buyers have to wait closer to nine months.
In addition, there are so many new homes being built that people who are trying to sell their existing home are finding it hard to compete with all the new construction. As a result, home prices are slightly down in many areas, and houses may stay on the market a little longer than in previous years.
Fortunately, demand for homes in general is still higher than usual and is expected to remain that way the rest of the year. This bodes well for both construction workers and sellers. And of course the increase in new home construction is good news for buyers hoping to find their dream home this year.