New Housing Units Under Construction At Highest Level In Almost 50 Years

by

Update to Institutional Investors Buying Up Properties Are Putting Inflationary Pressure On Rents And Home Prices.

Some good news (maybe) today. Axios reports America’s housing boom is also a backlog:

America doesn’t have enough homes for all the people who want to buy them. So the construction sector is getting busy — or at least trying to.

Driving the news: Homebuilding activity has surged, with the number of new housing units under construction soaring to the highest level in nearly 50 years.

This is good! A pipeline of new homes could someday help relieve the pressure of rising housing costs.

      • Shelter costs are the single biggest driver of consumer price inflation. They were up 4.4% over the last year.
      • And don’t forget the impact on the labor market. Over the last 12 months nearly 40,000 new jobs were created in residential construction.

Yes, but: Data on housing units currently under construction doesn’t tell the whole story, analysts say.

      • Supply chain snarls on everything from gutters to garage doors have led to a massive backlog of houses languishing in the pipeline. (The WSJ recently spelled this out.)

Worth noting: It also remains to be seen what the surge of housing construction means for individual home ownership.

      • Unlike the housing construction boom of the mid-2000s — which was dominated by single-family construction — current activity is more heavily focused on multi-family buildings.
      • An increased supply of apartments on the market should help ease the squeeze on renters at some point. But it won’t help would-be homebuyers anxious to get on the property ladder, who are facing short supply right now.

This sounds very much like institutional investor driven decisions. Rentier capitalists want the income flow from rental properties over a period of years. Single-family homes are a one time purchase for home builders, and then they must develop the next subdivision.

Note: Building new homes and bringing more people into Arizona when we are confronting a water shortage (and eventually water rationing) as we are in the midst of a “megadrought that’s gripped Arizona and the Southwest since 2000 is the driest in more than 1,200 years,” Report says drought may be worst in 1,200 years, little relief in sight, does not make logical sense. We may be considering building moratoriums in our future. When the water runs dry, Arizonans will be “climate refugees” fleeing this state for greener (wetter) pasteurs.





Discover more from Blog for Arizona

Subscribe to get the latest posts sent to your email.