The National Association of Home Builders (NAHB) recently released a series of market-based graphs and data points predicting a significant year of growth for the industry.
During a Construction Forecast Webinar, the NAHB worked with housing and economic experts to present data on the current status of the industry as well as growth predictions through 2016.
One of the economic experts on the panel, Len Kiefer, deputy chief economist at Freddie Mac, predicts that 2016 will be the housing market’s best year in a decade.
The single family market is expected to see the strongest growth in 2016. It’ll be the first year since the housing crash that single family housing is expected to outpace multifamily.
This market is forecast to rise 14 percent through 2016. This surge will be driven in part by Millennials looking to move out of apartments and into single family homes.
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As the single family market continues to grow, the steady growth in multifamily housing will start to level off in 2016. The experts on the panel predict a four percent decline in new multifamily starts.
Despite the predictions of growth in the industry, builders still face challenges that hinder new construction. The four driving forces stalling new home starts are labor, lots, lending and housing inventory.
Labor shortages were determined to be the top construction challenge in 2015, and experts predict this challenge following builders through 2016. Lot availability and lending constraints are connected, as more builders are reporting difficulties securing construction loans. These challenges have led to a tight housing inventory, which has caused prices to skyrocket in half of the country’s largest housing markets.
Even with these obstacles stalling growth in the market, experts are still predicting the best housing year in a decade in terms of home sales.
A combination of low mortgage rates, demographic changes and Millennials jumping into home ownership will create a healthy market environment for builders.
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