2017 forecast of home building

by Property Management Software on December 31, 2016

Home building forecast

Home building forecast

At face value the numbers make no sense. A monthly survey of homebuilder confidence in December released Thursday from the National Association of Home Builders spikes to the highest level in 11 years. The one-month move, entirely attributed to Trumponomics euphoria by NAHB executives, was the biggest in 20 years.

One day later, the monthly numbers on home construction are released by the U.S. Census, and they tank 19 percent. So builders are super happy, but they’re not building more homes.

There are several reasons why these numbers diverge.

They actually used to track very closely, but right around the end of 2012, when home construction was bouncing around the bottom of the worst crash in history, they kind of got a divorce. Optimism began to recover quickly, but homebuilding did not. Some say it’s just basic business psychology.

A contractor moves lumber for a house under construction in the Norton Commons subdivision of Louisville, Kentucky.

“During the course of the recession, the builders, being entrepreneurs, were sometimes more optimistic than the market has been. I think as we come back to normalcy, you’ll see a pretty parallel track,” said Jerry Howard, NAHB’s CEO. “They have to be optimistic, or they have to get into another profession.”

Why are home builders confident? CLICK HERE

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