Homes in the Pipeline Growing In Numbers
Homes in the pipeline have appeared across the United States as aspiring home buyers have grown ever more frustrated by the limited houses on the market.
Builders started construction on about 1,180,000 new homes across the country last month, which is a 30.9 percent increase from February 2015. The figures are according to the U.S. Department of Commerce's monthly residential construction report. The number of new houses also rose 5.2 percent from January.
Jonathan Smoke, chief economist of realtor.com, had stated that home builders are responding to the demand out there as there was not enough supply of homes to keep up with the increase of potential buyers.
Homes in the pipeline have sprouted because of the number of newly authorized permits, which builders need to secure before starting construction. This figure increased 6.3 percent from the previous year, but Smoke was worried that the 3.1 percent drop from January to February may indicate a slowdown. According to News & Star, Smoke claimed that this is not a good sign as more construction was needed to cope with demand.
The chief economist also noted that despite the high rental rates, the number of permits issued for apartment buildings dropped 9 percent from January and was down 10 percent from the previous year. Smoke said that this does not bode well for renters, as slowing down of increases will not happen any time soon.
According to Homes & Property, construction had been slower than many expected, as developers are trying to find property and the labor needed to build new. David Crowe, chief economist at the National Association of Home Builders, stated that developers have figured out that it is more cost-effective to focus on luxury housing, since only 10 percent of home buyers purchase a new residence.
Homes in the pipeline buyers are growing families who decided to trade in their existing homes for larger, more modern ones.