IS THE GAP BETWEEN HOUSING SUPPLY AND DEMAND BEING CLOSED BY HOME BUILDERS
The current census reports convey a positive message for the housing market.
The amount of housing completions has grown by 2.2% from last year. The continuous increase in housing starts every year is making it evident that the housing supply is going to increase rapidly.
The speed of completion of houses, at 1.26 million SAAR (Seasonally Adjusted Annualized Rate) is very significant as it shows the availability of surplus housing during the shortage. With an increase in the rate of builders completing homes, the gap between inventory and demand will be closing. However, home builders will face the problem of an increase in millennials purchasing their own homes and baby boomers now living longer.
There is another important factor that shows that demand and supply are evening out. Construction jobs have increased by nearly 4,000 between the months of May and June. This gives hope that home building is only going to increase over the coming months.
Some of the highlights from the Chief Economist are as follows:
- Over the last year there has been an increase in home completion which eases the pain of the housing shortage.
- The increase in housing starts, building permits, stock units and completions implies an increase in supply which is a positive message for the housing market.
- The amount of housing starts is 99,000 units higher than in 2017.
- We are on our way to meeting the market demand for homes.
We still have work to do to close this gap between demand and supply of homes, but the trends that have been seen lately show nothing but positive growth.