Single family construction presents a puzzle: with the economy in the seventh year of expansion, why has home construction remained near depression levels?Construction is not depressed due to lack of demand from consumers – it is being held back by supply-side constraints in land, labor and financing which have not recovered from the 2008 housing crisis. That demand remains robust can be gleaned from strong increases in house prices. But we dug deeper, looking at states with strongest population and economic growth and found that even there, supply remains depressed.
In an environment of constrained supply, we expect to see continued home price appreciation and slow but steady growth in construction. Here’s why:Read More