What Does More Housing Starts Mean For Buyers and Builders?

With the recent surge of housing starts from builders, the market is looking in a lot better shape and could be a just big enough foundation for consumers to jump on board.

New residential housing starts for May 2023 gained 21.7 percent since the previous month, according to a U.S. Census Bureau report released Tuesday. A positive increase for the market as a result of home builders and construction firms responding to the increases in home sales, specifically new construction.

The first quarter of the Gross Domestic Price (GDP) increased higher than expected according to a report made last month by the U.S. Department of Commerce. GDP experienced an increased rate of 1.3 percent in the first quarter.

Following the news of the GDP growth a data analytics firm that serves the construction sector, Dodge Construction Network, said the decrease in residential fixed investments. The downward spending reflects a slowdown in housing construction and spending on residential structures, such as new housing units, renovations, and improvements.

What we know now is a trend in home buyers looking toward newly constructed residential spaces rather than existing properties could likely become more appealing for the market.

Rising consumer spending and rising home starts bode well for the housing market’s short-term future, however, factors such as material costs, mortgage rates and labor shortages will likely continue to hinder the growth of the market.

Material goods were a contributing fact when looking at the economic growth in this year’s firth 3 months but affordability for both the consumer and constructor will determine what direction the market approaches as quarter two for 2023 concludes at the end of June.

Posted June 20, 2023.