More New Homes and Less Free Land

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The number of new homes in the United States is expected to increase for a second year in a row and in 2014 the increase is projected to be even greater than it was in 2013. The housing market is experiencing recovery and this is good news for both property owners and builders. At the same time, there is less free land for building companies to buy and build new houses. This may have an adverse effect on the market and push prices further up.

In 2013, the new home construction rose by 18%. In 2014, it is expected to rise by 25%. Despite the monthly fluctuations in the housing market and the slowdown due to the extremely cold winter, the demand for homes is projected to grow as consumers become more confident in the economy and in their earnings. Sellers expect a very strong spring sales season, even though it started late this year.

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The recovery of the housing market is clearly evident from the rising property prices. In 2013, the average increase was slightly over 11%. In some areas, it has as high as 13%. Many home builders earned their highest revenue since 2006 in the last quarter of 2013.

At the same time, there are factors which hamper the recovery. One of them is the reduced availability of land. During the housing downturn, the supply of land was higher and prices were considerably lower. However, many builders refrained from taking advantage of this situation due to the great uncertainty in the housing market and due to their shaky profits. Now as a land shortage is forming, the price of land is projected to increase by as much as 25% in some central city areas. This will inevitably lead to an increase in property prices as well.

Even though the housing market is recovering, the revival can be slowed down by slower growth in building and the still low inventory.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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