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Housing construction trends are showing signs of an increase in total housing starts this year, according to Metrostudy's second quarter 2015 Home Building Outlook, which reviews housing construction trends across the top 100 housing markets nationwide.
The Home Building Outlook provides the building industry with insight into local residential construction activity as well as national forecast.
According to the second quarter results, housing starts are expected to reach heights of 1.07 million this year, with 691,000 of those being single family homes, according to the Commerce Department.
Metrostudy’s proprietary survey database, which contains data from over 100 CBSAs and consists of hand-counted lots and newly occupied homes, indicates move-ins were 9 percent higher in the second quarter of 2015 compared to last year and new housing starts were up 11 percent.
New home sales are expected to increase 22.4 percent to 535,000 this year, up from 437,000 in 2014, as defined by the Commerce Department. Denver, Austin, and San Antonio were the best overall new home markets in terms of health and local new home sales forecast. In terms of sales volume, southern states dominated the market, with the largest new home markets expected to be Houston, Dallas, and Atlanta.
“The U.S. housing market continues to gradually expand,” said Brad Hunter, chief economist of Metrostudy. “While some in our industry are eager to see more rapid growth, a steady and sustainable rate of increase will be beneficial in the long run. Demand factors should continue to improve, and as rising rents eventually hit the pain point, more people will begin to consider home ownership.”
Despite these positive expectations, housing starts and completions do not appear to be climbing upwards according to new residential construction data released in July by the U.S. Census Bureau and HUD in a joint announcement. The data found that single-family building permits rose slightly, while housing starts and housing completions both declined in June 2015.
“An increasing level of new construction is the primary way that the housing market will find balance in this surging demand, but tight supply environment,” said Jonathan Smoke, chief economist at Realtor.com. “Both home prices and rents are rising at well above normal levels, and that market signal is exactly what builders and developers need to find confidence to pull permits and start new construction.”
However, there were some positives of this report. Trulia’s chief economist, Selma Hepp, noted that while housing starts and permits have been volatile, there has been a strong rebound since the end of the winter months which suggests 2015 may be the best year in housing since the recovery began.
“Single-family starts continued to move sideways and are still at less than a half of their historical average,” Hepp said. “Large increase in today’s readings will help ease tight inventories of new homes, and home price pressures. However, completions still have a lot of room to catch up with starts indicating there will be more inventory coming on, but today’s strong increase of 22 percent suggest completions are coming on healthy.”
Click here to view Metrostudy's second quarter 2015 Home Building Outlook.
