Home construction well below historical norms

Home construction well below historical norms

Home construction well below historical norms
The number of home permits being pulled in 2021 is certainly higher than it was a year ago when the construction industry seemingly halted amid the coronavirus outbreak. As of Q2 2021, permits to construct new homes were 48 percent above where they were during the Spring of 2020. Still, even with this rebound, construction activity is well below the long-term historical norms.

In fact, the current pace of new home construction is 43 percent below the 1988-2007 average.

Home builders are struggling to secure land to develop and when they do, they are faced with a labor shortage and surging costs for construction materials.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.