Home builders

Homebuilders continue to catch up | News

New home construction hit a major benchmark in February, according to Zillow, when more than 1.5 million residential building permits were issued in the previous 12 months. This level of activity indicates a real estate boom that has not been seen since August 2007.

This building boom has drawn comparisons to the glut during the Great Recession, but Zillow’s analysis indicates that builders are only beginning to fill the hole of unmet demand.

“In recent months, builders have been going full throttle to build new homes to meet strong demand, and we’ve just seen the first full year of above-average construction since the housing crash of the mid-2000s.” , said Zillow senior economist Jeff. Tucker said in a statement. “This is not so much a new round of new construction boom as an attempt to avenge the last recession. There is still a long way to go to make up for more than a decade of slow construction, and some markets have more time to go than others.

Zillow estimates that since 2008 there has been a shortfall of 1.35 million households in just the 35 largest metros. At the current rate of permits, this shortfall is as if no homes had been built for 2.7 years.

While homes need to be built, builder activity has been hampered by supply chain disruptions and labor shortages. Completion of new home construction has stalled since the spring, and Zillow analysis shows an 8.4% decline since last year. The number of houses authorized, but not started, increased by 44.8% compared to a year ago.

The housing shortage in the most populated markets has left home buyers competing for a limited supply, driving up prices. Since the Great Recession, single-family homes have appreciated more than other home types, up 47.9% since January 2008.

Dallas had the largest single-family building permit deficit after the recession, falling 167,093 homes behind the pre-2000 average, according to Zillow. Miami (-142,650), Phoenix (-122,288) and Seattle (-113,292 ) have also fallen behind.

Nine metropolises, mostly in the Midwest, have a surplus of single-family new construction: Chicago (+73,467), Pittsburgh (+47,254) Detroit (+46,990), St. Louis (+43,300), Cleveland (+35 210), New York (+31,634), Philadelphia (+16,949), Baltimore (+16,342) and Cincinnati (+5,183). These metros have generally experienced modest population growth since 2008, and home value growth in all but Pittsburgh has been below the national average during this time.