January 22, 2019

Is there a Housing Construction Boom just Around the Corner?

From 2002 to 2007, there was a net average of 1.3 million new American households created every year. There was an average of almost 2 million new homes built annually which we now know did not yield very positive results.

Today, it’s just the opposite. In the last year, 1.1 million new households were formed, but just 700,000 new homes were built.

Just as the overbuilding of homes was not sustainable and was a factor in the housing bubble, today’s level of home building cannot last, it’s just far too low to meet demand.

Harvard’s Joint Center for Housing Studies estimates that the formation of new households will average 1.5 million per year from 2010-2020. New home construction may need to more than double to meet these projections.

This boom in new housing may be the good news all of us have been waiting for, a lot of new jobs. The National Association of Home Builders estimates that 3.05 new jobs are created for every new home built. The Center for Housing Policy puts that figure at 2.1 new jobs. Whatever the exact number, between 2- 3 new jobs will be created when this new construction boom gets underway and that will be a big boost to the U.S. economy.