Everyone is looking for signs of economic recovery. Most experts currently believe that the economy will see a full recovery in the third quarter of 2020. They also believe that the housing market will be the factor that brings us out of the recession. Builder confidence may be the spark needed to start the recovery. The construction of new homes will be a major driving force this year.
According to the National Association of Home Builders:
“New home sales jumped in May, as housing demand was supported by low interest rates, a renewed household focus on housing, and rising demand in lower-density markets. Census and HUD estimated new home sales in May at a 676,000 seasonally adjusted annual pace, a 17% gain over April.”
Builder confidence is also rising which is an opportunity for new construction.
The NAHB also states:
“In a sign that housing stands poised to lead a post-pandemic economic recovery, builder confidence in the market for newly-built single-family homes jumped 21 points to 58 in June, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Any reading above 50 indicates a positive market.”
Builders have noted an increased in buyer demand for single-family homes in suburban areas. This change in trend is a result of COVID-19. Families are transitioning to working virtually from home and as a result they want to purchase homes in the suburbs with more area for their family and home offices.
The Monthly New Residential Construction Report from the U.S. Census stated that there was a 14.4% increase from April to May for authorized new residential building permits. Housing starts also increased by 4.3%.
Housing permits and starts are currently much lower than that of 2019. New construction is still building its way back up in this economy. The builder confidence indicates that the new construction will start and have an impact on improving the economy. Builders will create higher inventory in the housing market and as a result play its part in getting us out of this recession.
Dean Mon, Chairman of the NAHB notes:
“As the nation reopens, housing is well-positioned to lead the economy forward…Inventory is tight, mortgage applications are increasing, interest rates are low and confidence is rising. And buyer traffic more than doubled in one month even as builders report growing online and phone inquiries stemming from the outbreak.”
The gap between high buyer demand and low seller supply may be met by the new construction homes. Experts are showing data that the new construction homes are coming. If you have been thinking of selling your home but not sure where to move, know that new homes are on the way.
If you are interested in buying or selling, contact Prestige Waterfront Realty at 954-830-7000. South Florida’s Real Estate Experts located on Galt Ocean Mile.