By Tenley Zeisel
Have you ever searched for a home and placed an offer only to get outbid because of low inventory? Nothing is more heartbreaking than knowing the home you wanted was sold to a higher bidder. With demand for homes increasing, this situation is known all too well among hopeful home buyers. But, according to recent reports, the amount of homes being built is increasing meaning more home buyers will soon get their dream homes.
So, why does a rise in new home construction matter to you? Here are some reasons why you shouldn’t lose hope on owning the home of your dreams. If it doesn’t exist just yet, don’t worry. It’s on the way.
When you’re looking for a new home, nothing is more frustrating than not having very many options to choose from. With so many home buyers looking for a new home, the competition on choosing from just a few homes is heightened. The only solution to meeting such high demand in a low inventory market is to increase construction of new homes.
The real estate industry as a whole has steadily increased in the last eight years to try and fill the gap. According to a recent report from the U.S. Bureau of Economic Analysis, construction growth rose in the fourth quarter of 2017. Continued year-over-year growth in home completions means more homes are on the market in the short-term while also dramatically increasing construction employment, according to Housing Wire.
Also, the number of building permits rose 7% in January 2018. “The surprisingly strong results for both permits and starts reflect the healthy demand that builders continue to see in the market, despite rising costs and affordability challenges,” according to Thunderbolt Pipeline. These increases show that new home construction is likely to keep rising, but that may also mean that prices will, too.
“With homebuilding on the rise, this is the time to buy because as momentum increases so do prices,” said Doug Moran, Chief Operating Officer at Dream Finders Homes. “Materials, labor, land values and municipal costs of permits will go up causing builders to increase prices to offset these types of increase.”
Increase in Employment
It’s widely known throughout the construction industry that finding and hiring enough qualified workers can be a struggle. “Construction saw a 30 percent drop in employment in the previous decade, which was the largest drop of any industry. They also began laying people off a year before the recession began and did not start hiring again until much later than other industries. This has led to difficulty in bringing skilled laborers back to the industry,” according to the National Association of Realtors.
With that reality, construction employment actually rose by 17,000 jobs in April 2018. The average wage was also 10% higher than other non-farm industries, according to Construction Dive. This increase in pay means firms can attract experienced workers to build your home to the highest standard. With more skilled workers, the time it takes to build your home can be shaved away.
The hope is also to start recruiting young people right out of high school to help replace retired Baby Boomers. Only 3% of adults ages 18 to 25 picked the construction trades for a career field in a survey by National Association of Home Builders. But, young people will eventually “come to view construction as the relatively stable career it has traditionally been,” according to Initiafy. This means the construction industry will have to tailor its recruitment strategy to fit young workers’ expectations for jobs. These include team collaboration, company culture and technology use, according to a report from the Foundation of the Wall and Ceiling Industry.
With all metrics showing new home construction on the rise, the ability to own your dream home is becoming more and more realistic. Don’t let low inventory in resales keep you from making that jump to a home you LOVE. Design a home that truly fits your lifestyle. When you don’t want to settle on a dream home, build with Dream Finders Homes. With divisions in Jacksonville, Savannah, Orlando, Hilton Head, Austin, Denver and D.C., we hope you keep us in mind. We can’t wait to get started.