Economists have recorded a decrease in construction of new homes. The drop in percentage is about 9% and is expected to continue to increase in the next couple of months.
The demand for new homes has decreased
The demand for new homes has decreased in the last ten years hinting at a potential housing market crisis. Many of us remember the hard times over twelve years ago. The market at the time had crashed and sent the United States into a recession and crisis. While the United States has improved tremendously since then, there is always a fear a recession may strike again.
The growth of population is the lowest registered in 80 years
According to William H Frey, we are at a historic low for US population growth. The growth of population between 2017 and 2018 is the lowest registered in 80 years and only has a growth rate of 0.62%. The decline heavily relies on the aging of baby boomers and the child population declining nationally. With this new generation of young adults, less children are being born and priorities are shifting. Young adults between the ages of 18 to 29 statistically are more likely to stay at home or rent rather than move out or buy a house. This age group is primarily focused on College or Career goals and are okay staying in their comfort.
Construction of new homes is hitting rough patches
The drop in population heavily impacts the housing market now. Because families are becoming smaller, houses are being opted out for apartments.
As the demand for new homes decreases so does the construction of these new homes. Construction of new homes is hitting rough patches; struggling to afford land, labor, and materials. Finding land that has been zoned at a reasonable price is difficult and is only the beginning of a costly venture. Due to the lack of Tradesmen currently in the construction company, the demand and the price for their labor has increased which in turn has left projects abandoned or stalled.