In a survey of more than 100 economists, real estate experts and investment strategist conducted by Zillow and Pulsenomics, a majority – 54% - say that they don’t expect new home construction to reach an annual rate of 1 million units – the seasonally-adjusted historic average – until 2022 or later.
The annual home construction pace hit a peak of 1.8 million units in 2006. Following the recession, the it has not recovered to the above historic average. One in four of the experts surveyed expect home construction activity to rebound by 2021, while 16% expect a return to the average by next year.
And that has implications for buyers. “Without new homes to meet population growth and replace an aging housing stock, home buying is expected to move further out of reach,” Skylar Olsen, Zillow’s director of economic research, said in the report.
To combat the slow-down in home-building activity, the economists polled by Zillow and Pulsenomics suggested a range of solutions. Over half of these experts suggested relaxing local regulations surrounding home construction — a suggestion some politicians made during a Senate hearing about housing finance reform this week.
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