According to the US Census Bureau, the annual rate of new house construction starts calculated in December increased 11.3% over November.
That is a stunning increase for one month. In addition, the National Association of Home Builders projects a 10% annual increase for 2017 over 2016, already a strong year. That translates into more than 1.2 million new houses in 2017. But, even at these numbers, adjusting for population and income, house construction is still almost 40% below its historical average. That is a lot of room to grow, and that pent-up demand is the reason many home builders are so optimistic.
We will address new home construction in Florida and Southwest Florida in other posts, but given the overall importance of the house building business for the US economy (15-20% of total GNP), we think these numbers are indicative of a strong economy and strong real estate values going forward.
