Residential Construction To ‘Increase Substantially’

Credit: Forbes

By Aly J. Yale for Forbes

The new year is shaping up to be a good one for homebuyers—at least those interested in buying new homes. Not only are homebuilders more confident in the market than have been in 20-plus years, but recent construction numbers are surpassing expectations.

In fact, according to the U.S. Census Bureau, residential building permits hit a 12-year high last month, surging 11.1 percent over the year. Housing starts were also up, jumping 13.6 percent over last November, while housing completions rose 7.3 percent. It’s the sixth consecutive month housing starts have grown.

The developments, along with strong economic growth, spurred Fannie Mae to revise its housing forecast for 2020. The company now predicts housing starts to jump 10 percent across 2020, with 1 million new homes hitting the market by 2021.

In total, Fannie Mae predicts new home sales to grow 5 percent in 2020, with much of the growth on the tail-end of the year, and 5.5 percent in 2021. Existing home sales will also increase, its experts say, but at a slower pace (1.5 percent in 2020 and 0.2 percent in 2021).

According to the latest Housing Market Index from the National Association of Home Builders, the country’s leading builders are feeling equally as optimistic. The index, which measures builder sentiment around single-family home sales, sales expectations and buyer traffic for the next six months, saw increases across the board, notching its highest reading since mid-1999.

Read more at Forbes.