The National Association of Home Builders recently hinted at the new lows the builders’ confidence is hitting due to continuous bad weather, the hindered supplies delivery for construction sites, and the shortage of skilled workers.
Forbes is analyzing the current state of demand and supply, juxtaposing the numbers of completed housing projects last year and the growing need of single-family and multi-family units now.
In 2013, there were less than one million completed units.
This year, if we look at data indicating population growth, at a first glance it seems that the country needs some 900,000 new units to satisfy the demand.
That’s misleading, argues the author of the article, because if we look at the estimated number of new households, the number will rise to 1,4 million new homes.
The discrepancy comes from the fact that during the recession, many adult children moved back with their parents. So in 2009, for instance, 400,000 new households were added, but the potential buyers were part of those 2,5 million people living with their parents.
In case they move out and get their own place, the need for completed housing projects will be greater than the ones being built.
Another reason to believe this possible is that the job market is also picking up and, thus, younger people would be able to afford their independence. The article states that some 1.2 million housing units will be needed this year, and most likely in 2015, too.
Thus, for 2014 and 2015 Forbes predicts “moderate gains in home construction and mild price appreciation.”
Read the full article in Forbes.