Since the last recession homebuilding activity in the US has been slow. According to a recent survey of over 100 economists and real-estate specialists the majority said they don’t expect homebuilding to reach 1 million units annual until after 2022.
This is a problem for buyers. As housing stock ages and the population grows,the absence of new properties means that the ability of people to get on the real estate ladder is going to be reduced.
In 2006 the housing stats showed an annual build of 1.8million homes, this was the highest since 1956. Between 1956 and 2006 the housing starts were always around 1 million homes annually but after 2006 the recession hit and homebuilding stalled.
It doesn’t look set to improve its pace in the near future and will certainly not reach previous levels.
Some experts feel that housing starts may hit their past average in 2020, but there are many who are looking as far ahead as 2025 before averages start to approach historic levels.
Zillow, the real estate website, says that the slowing growth in home value has also reduced incentives for builders to start new housing projects. With growth rates anticipated to increase by 3.6% in 2019 and only 2.5% in 2020 this paints a pessimistic picture.
In another pole by Morning Consult, around 20,000 Americans were asked about the lack of affordable housing and 80% of respondents believe this is a problem.
The study, conducted on behalf of the National Association of Home Builders, indicated that even a small increase in real estate can take homes out of the reach of many, although this has sometimes been ameliorated by falling mortgage rates.
The experts in Zillow’s poll suggested some solutions to the current impasse including relaxing local house building regulations, which was also raised during a Senate meeting this week as a way to improve the current housing shortages within the US.