More single-family homes will be constructed in 2017, but at a gradual rate, reported economists at the recent Home Builders Conference. The NAHB expects single-family construction to rise 10 percent to 855,000 units, and to 12 percent to 961,000 in 2018. according to NAHB Chief Economist Robert Dietz,
Dietz said, “While positive developments on the demand side will support solid growth in the single-family housing sector in 2017, builders in many markets continue to face supply-side constraints led by the three Ls—lots, labor and lending,” said Dietz.
Confidence and growth in the economy could give home-building a boost, with home builders optimistic that the new administration will lower construction costs. Said Dietz, “Regulatory requirements make up nearly 25 percent of the cost of a new home. Townhouse construction, Dietz said, is growing and viable, especially for first-time homebuyers, comprising 12 percent of housing starts nationally.”
On the topic of homeownership, economists expect mortgage rates to average 4.5 percent in the year ahead, and 5.3 percent in 2018. “We anticipate a stronger economy will translate into higher mortgage rates,” said Economist Dr. Frank Nothaft. “Meanwhile, we expect moderation in 2017 for rent and home price growth, but it will still be higher than inflation.” Source: National Association of Home Builders