Housing Inventory and Housing Starts
2018 by Jane Chero in General
The Housing Industry continues its upward momentum with median prices among both existing and new homes catapulting by over 40 percent since 2011. This is the final factoid in a series of four factoids detailing the steady rise of home prices paired alongside housing inventories and median incomes unable to keep the same pace.
Along with rising home prices, low inventory has posed a problem for many home buyers wanting to upgrade housing or buy for the first time. Forecasters see little change on the horizon for existing home sales. Although in a much higher price bracket, new home inventory has steadily increased over the last year – rising 16.5 percent from July 2016 to 276,000 homes in July 2017. In comparison, at a year-to-date inventory of 1.9 million homes, existing home inventory had a typical dip in the fall and winter but is still 9 percent lower from July 2016 to July 2017.
The growth in new Single-Family unit housing starts will not let up anytime soon. Starts are projected to have double digit growth over the next two years. However, Multi-Family unit housing starts (apartments) has fallen dramatically since the boom of 2014-2015 brought on by pent up demand and also the Millennials pouring into the rental market. Developers complain of long permitting and construction time spans also a lack of skilled workers. However, even though Multi-Family starts are projected to fall slightly next year, this reflects the apartment industry returning to a more realistic growth cycle. The challenge to growth in new home starts will be the affordability for first-time Millennial buyers, and current homeowners seeking to upgrade.