Zillow®, the Seattle-based, online real estate marketplace company, in a new analysis shows just how far builders still have to go to fill a 1.35 million new-home construction deficit — the result of a decade of underbuilding.
In February of 2021, new-home construction in the U.S. reached an important milestone, when more than 1.5 million residential building permits were issued over the prior 12-month period. The level of activity denotes a housing boom that hasn’t been seen since August 2007. The momentum continued through the summer, reaching 1.69 million permits in the year ending in August.
This building boom has drawn comparisons to the glut that characterized the Great Recession; but in truth, builders are only beginning to fill the hole of unmet demand that was dug in the fallout from the mid-2000s housing bust.
Zillow senior economist Jeff Tucker added his commentary to the new analysis, saying, “Builders in recent months have put the pedal to the metal to get new homes up and meet a rush of demand, and we just saw the first full year of above-average construction since the mid-2000s housing crash. This isn’t a new boom cycle of new construction so much as it’s an attempt to get even from the last bust. There is still a long way to go to catch up from more than a decade of slow construction, and some markets have longer to go than others.”
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Home builders are still playing catchup during construction boom