house, construction

The new year is looking optimistic for potential homebuyers, as well as for home builders. Residential construction companies are more confident than ever that there will be a booming market in 2020 due to the latest construction numbers exceeding expectations. According to the U.S. Census Bureau, residential construction permits reached a 12-year high this past November, increasing by 11.1% over the year. [1] With such positive statistics, our construction safety school provides detailed insights on the prospective increase in residential construction come 2020.

Increase in Home Sales

The residential construction forecast in 2020 is looking great for home builders and real estate companies since housing starts rose 13.6% last month along with a 7.3% increase in housing completions, [1] making November the sixth consecutive month where housing starts have increased. The recent numbers, as well as the strong economic growth, has driven real estate companies like Fannie Mae to modify its housing forecast for the new year. The company projects single-family housing starts to increase by 10% throughout 2020, with 1 million new homes on the market by 2021.[2]

Chief economist and senior vice president of Fannie Mae, Doug Duncan further explains, “We now expect single-family housing starts and sales of new homes to increase substantially, aided by a large uptick in new construction as builders work to replenish inventories drawn down by the recent surge in new home sales activity.” [3]

Overall, Fannie Mae projects new home sales to rise 5% in 2020, with most of the growth taking place at the very end of the year and 5.5% into 2021. According to the company’s experts, current home sales will experience an increase as well, but at a slower pace around 1.5% in 2020 and 0.2% in 2021.

A Bright Future for Home Builders

The nation’s leading home builders are also looking forward to the increase in residential construction come 2020. According to the National Association of Home Builders’ (NAHB) recent Housing Market Index – which surveys builder sentiment on single-family home sales, sales prospects and buyer traffic for the next six months – observed increases across the board, reaching its highest reading since 1999.

“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” NAHB Chairman Greg Ugalde said in a statement. [4]

 

If you work in residential construction, expect to have your work cut out for you with the projected increase in residential construction come 2020. However, if you’re new to the industry and looking for a breakthrough in your career, enroll in our construction safety manager training courses by contacting The Safety Group, LTD. at 212-933-9071 in New York or 215-475-5810 in Philadelphia today.

 

 

 

Sources:

[1] United States Census Bureau – Monthly New Residential Construction, November 2019

[2] Seeking Alpha – Fannie Mae boosts Q4, 2020 GDP forecasts

[3] CNBC – Fannie Mae boosts 2020 housing forecast ‘significantly’

[4] Yahoo! Finance – Builder Confidence Ends 2019 at 20-Year High: 5 Housing Picks