Why the Surge in Construction Won't Lead to a Housing Market Crash

by Bret Jenny

Debunking the 2008 Comparisons: Why This Time is Different

The housing market is abuzz with news of a surge in new home construction, leaving some to wonder if we're headed for another 2008-style crash. But fear not, dear homebuyers and sellers! The data tells a different story.

The Post-2008 Rebound: Catching Up on Lost Time

Following the 2008 housing market crash, new home construction plummeted, leading to a decade-long period of underbuilding. But with the recent surge in construction, builders are finally catching up to meet demand. The graph below shows the number of new homes built over the last 52 years, highlighting the significant gap in construction following the crash.

No Oversupply in Sight: Builders are Being Cautious

Despite the increase in new home construction, there's no need to worry about an oversupply of homes flooding the market. Builders are being cautious, responding to market signals and pulling back on construction in response to high mortgage rates and decreased buyer demand.

Peak New Home Construction: What it Means for You

If you're in the market for a newly built home, now may be the perfect time to start your search. With builders slowing down their pace, we may be at the peak of new home construction for the year. This means you may have more options to choose from now than later on.

Expert Insights: NAR Chief Economist Weighs In

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), predicts that home completions will decline in the coming months. "Given the recent declines in housing starts, home completions will steadily show declines in about six months."

Work with a Local Real Estate Agent for Success

When searching for a newly built home, it's essential to work with a local real estate agent who knows the market inside and out. They'll provide valuable insights into builder reputations, market trends, and more.

The Bottom Line: No Need to Worry

In conclusion, the surge in new home construction is not a cause for concern. Builders are being cautious, and the market is responding to their efforts. So, if you're ready to buy or sell, now is the perfect time to take advantage of the opportunities available.