Within our current real estate market, there is a high demand for homes. Many individuals want to buy homes due to the low interest rates. And while we currently have a substantial supply of newly constructed homes available, the future supply of new homes might be in jeopardy.

New Construction Slow Down

New Construction Slow Down

Recently, the amount of permits issued to build new houses has decreased. From October to November permits were down by 10.4%, which is 0.9% lower than last year.  This data suggests there will likely be a restricted supply of newly constructed homes available in the future.

Based on economics, the limited supply will likely cause home prices to increase. There is also an increased demand for homes because many individuals want to buy before interest rates spike.

We must also take into consideration the seasonal real estate cycles. Many future homeowners do not buy homes around the holiday season. Often builders do not want to construct new homes in the cold winter months either.

There is still hope for the 2017 market though. While the market might be currently slowing, many professionals predict that 2017 will be better for homebuilding than 2016. Due to low interest rates, the presidential election, and young adults moving out of their parent’s homes; the homebuilding industry will likely rebound.

By Anna Hellman


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