Home Builders Association of Denver | Single-Family Production Will Continue to Gain Ground in 2019

Single-Family Production Will Continue to Gain Ground in 2019

Speaking before the National Association of Counties Annual Conference & Exposition in Nashville on July 15, NAHB Chief Economist Robert Dietz said that the housing recovery will continue to move forward but that builders continue to face persistent supply-side headwinds.

Single-family housing production is expected to post high single-digit percentage increases in 2018 and 2019, with starts nearing 1 million units by the end of 2019. While production continues to trend in the right direction, this is still far below normal production levels of about 1.3 million single-family starts per year.

On the multifamily side, NAHB is expecting multifamily starts to fall back in 2019 from 2018 levels to roughly 350,000 units. However, this does not indicate a weakness in this market segment. From 1995 through 2003, multifamily production averaged 331,000 units annually, which is considered a normal level of production.

NAHB also continues to work with Washington policymakers to reduce regulatory costs, which are hampering housing affordability. On average, nearly 25% of the cost of building a typical new single-family home – almost $85,000 – is attributable to government regulation. The average regulatory cost for multifamily production is even higher at more than 30%.

Even as single-family production remains a gradual, upward trajectory, Dietz said that builders continue to grapple with a number of supply side issues, including shortages of skilled workers and buildable lots and rising construction costs.

This article was shared by NAHB Now. Read the Article