America needs more homes. But there are not so many home builders around them to make them as they once were.
The Commerce Department reported Friday that construction began 1.74 million homes in March, at a seasonally adjusted annual rate. This was a significant increase from 1.46 million homes that began in February, when winter storms stifled construction and marked the highest level since July 2006, when the housing bubble was canceled.
The high pace of the building reflects a remarkable resurgence in the real estate market that the Covid-19 crisis has triggered, as low interest rates and suburban city dwellers have substantially increased demand. Some unevenness may occur, as rates have been on a higher trend, and a certain demand has probably been raised by families who would have finally left the cities, in any case.
But a combination of a growing economy, more millennial families and changes in how people and businesses can locate themselves as a result of the remote work revolution suggests that the need for new homes will only increase. Freddie Mac estimates that at the end of last year, the country had 3.8 million single-family homes in addition to what is needed to meet long-term demand.
Before the housing bubble burst, the demand would have been easier to meet. Then there were many more home builders, especially speculative builders who built houses without a guaranteed buyer. According to its American business conducted every five years, the 2007 Census Bureau counted 32,158 specification builders operating in the country. In 2017, it numbered 15,483.