New Construction Homes Are High in Demand

The National Home Builders Association reported that the number of owner households has been rising since the third quarter of 2016. New construction homes are rising in demand.

This demand comes from the slow gain of new residential construction over the past decade. This can be seen in the change of the median age of owner-occupied homes.  The latest data released in the 2016 American Community Survey reports the median age is 37 years compared to a median age of 31 years in 2005.

The decrease in new construction stemmed from many factors.  The remodeling market was encouraged over the purchase of new homes in the past.  One of the reasons was rising home prices that encouraged homeowners to remodel their current home. More than half of owner-occupied homes were built before 1980 in the 2016 report.  New Construction accounted for only 4 % of owner-occupied housing in 2016.

The future for new construction homes is bright. This can be seen in the households living in different ages of house stock. Out of the homes built after 2010 70% are owned by Generation X(age 35 – 54) and Millennials (age 18 – 34). Within this age range, homeowners who are between 35-44 make up 26%, age 45-54 make up 19% and under 35 makeup 25%.

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