2016 in Review: Residential Housing Market
February 2017As we continue the recovery process following the recession, 2016 was a phenomenal year for the U.S. housing market. Looking at various indicators such as building permits, housing starts, residential construction spending, and the sale of new and existing homes; over all 2016 ended on a strong note.
According to the U.S Department of Housing and Urban Development, an estimated 1,186,900 housing units were authorized by building permits in 2016. While this is only a moderate 0.4% increase over 2015, privately-owned housing units and single-family authorization both increased 0.7% and 4.7%, respectively, in December 2016 over November.
Housing starts had significant growth during 2016 with a 4.9% increase over 2015. The future outlook for housing starts is positive due to the increase in building permits issued during the last month of 2016. An estimated 1,062,300 housing units were completed in 2016, an immense 9.7% increase from the 2015 figure of 968,200 units.
Spending on residential construction also improved 5.2% in 2016 over 2015. The U.S. Census Bureau estimates that $456.2 billion was spent on residential construction alone in 2016 compared to 2015 where only $433.7 billion was spent on residential construction.
While new home sales slightly dipped during the last month of the year, overall 2016 showed massive gains with a 12.2% increase in new home sales in 2016 over 2015. Existing home sales had a moderate increase of 3.8% during 2016, with a total of 5,450,000 home sales.
Although 2016 saw positive signs for the housing market and forecasts are calling for continued growth and expansion during 2017, there will be some challenges facing the housing market such as scarcity of labor and lots and the continued increase in building and construction materials. However the continued increase in employment and higher paying jobs are allowing more individuals to invest in homes.
