Building the economy one house at a time!
The most obvious impact of new construction is the generation of jobs for construction workers. For each new single-family home that is built, the National Association of Home Builders (NAHB) estimates that three jobs are created. As this financial quarter advances, it will be interesting to watch how new construction will revive the US economy as it continues the struggle with lack of labor and slow income growth for low and moderate income households. If figures are anything to go by, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) noted that builder confidence in the market for newly-built single-family homes fell three points to 58 in February from an upwardly revised January reading of 61. To add to that, there has been a strong upward trend of renting homes in the past few years.
However, the NAHB, the Texas Association of Builders and the housing industry in general remain optimistic about the direct and positive impact of residential construction on the economy. Although Houston, America’s oil capital, saw a 49 percent drop in construction because of falling oil prices, the Dallas-Fort Worth-Arlington area witnessed a 19 percent growth in the value of new project starts for 2015. ‘There are a number of positive indicators out there that make me believe … this will be a good year for the economy and for housing,” said David Crowe, chief economist at NAHB, said. “Not only is housing finally driving some of that, housing is finally moving at a much faster pace than the economy.’
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