More Evidence that the New Home Construction Market is Growing

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The market for new home construction continues to grow.  Brad Finkelstein of National Mortgage News reported more economic evidence of a growing new home construction market in a March 14th article “New home mortgage apps signal strong market for homebuilding”.

According to Finkelstein’s article, February new construction loan applications grew 2.2% from a year ago and that Februrary’s volume was up 16% from the previous month.  That is great news for independent home builders as the existing inventory of home for sale to be constrained.

 

NAIHBR

NAIHBR

 

Inventory constraints are also driving interest in home additions and renovation opportunities according to a February 2017 survey of NAIHBR members.

New construction financing not catching up with housing market

Facebooktwittergoogle_plusredditpinterestlinkedinmail

In a short slide presentation, National Mortgage News recently published a  list of items constraining new construction financing (a reference link to the article is included below).  The six major factors included

  1. rising land cost due to market appreciation
  2. new construction credit remains difficult to obtain with most lenders
  3. shortage of qualified labor
  4. pressure from the rental market
  5. younger buyers are waiting longer
  6. Limited credit facilities are still hindering the market
New Constructoin

New Construction

NAIHBR members in a February 2017 survey reported findings consistent with some of the studies findings. Land lot prices and teardown opportunities have increased significantly over the last 12 months where many buyers who remained on the sidelines have now been priced out of the market.

Additionally, many builders named a lack of qualified sub-contractors as a current challenge to their business.  Since the housing crash, many skilled tradesmen were forced into other lines of work, leaving an demand gap for builders and renovating GCs.  Although market demand should eventually bring additional labor, for now labor costs for skilled trades is rising significantly.

 

About NAIHBR – www.naihbr.org/about/

NAIHBR Working with Local Builders to bring Transparency to custom home building

Facebooktwittergoogle_plusredditpinterestlinkedinmail

The National Association of Independent Home Builders and Remoldelers (NAIHBR) has begun working with select builders to bring information and transparency to consumers interested in new home construction.  The program seeks to bring multiple options to consumers when looking at lots or teardown properties along with matching them with possible financing options.

The program seeks to educate customers on the difference between builder cost structures, allowances and other elements of home construction that currently cause consumer confusion.  The program is being rolled out by region beginning with the Chicago suburbs.

NAIHBR National Association of Independent Home Owners and Remodelers

Contact Info

401 North Michigan Ave., Suite 1200, Chicago, IL 60611

(855) 733-8100
[email protected]

© Copyright 2018 NAIHBR Inc. © All Rights Reserved