In a meeting held this week, economists from the AIA, the National Association of Home Builders, and the Associated Builders and Contractors, discussed the health of the construction industry and all predicted growth for the industry through 2017. Despite the projected growth, the residential sector will face some challenges moving forward.
NAHB's chief economist, Robert Dietz, noted that the "inventory of existing homes is extremely tight, [but] the supply of new homes is growing." While this news is favorable for home building growth, it might run into some some issues such finding lots and labor. Writes Hanley Wood Data Studio:
The hard-hit single-family residential sector has more than doubled spending since the market trough during the Great Recession, but it has a long way to go before reaching full recovery, the economists say. A combination of low lot supply, a shortage of skilled labor, and a tightening in financing is driving up housing costs and pricing many potential buyers—especially Millennials at the early stages of their careers and many with burdensome student debt—out of the housing market, according to the NAHB's cheif economist Robert Dietz.
Dietz also dove deep into the biggest impediments for residential building growth in the future, focusing primarily on the three L's: labor, lots (the low supply of them), and lending.
National construction industry employment in the residential building sector is up year-over-year, however, a fairly modest 4.3% increase from 690.5 in July 2015, to 719.9 in July 2016 has not eased stress. Dietz noted that in a NAHB survey conducted last year, builders expressed that labor was the top building challenge in 2015 and the top anticipated challenge expected in 2016.