Given the shortage of housing inventory and the skyrocketing Builder’s Confidence Index, it would make sense to see a surge in new construction; this is precisely what has happened according to the Census Bureau’s monthly report on construction work.
Between January 2020 and August 2020, the Census Bureau reported that $927B was spent on new construction projects; this is about $40M more than the same period last year. Of that $927B, residential construction projects accounted for 42%, or roughly $589B. Given that the national inventory of homes for sale is at a 40-year low, and mortgage rates are also at record lows, housing prices are skyrocketing. This scenario represents a golden opportunity to expand housing inventory (by building new ones) with an almost guaranteed high return-on-investment (“ROI”). To that end, builders have seized the opportunity by completing approximately 1.2M new homes in August 2020.
The takeaway here is that new construction is a very lucrative investment at this time, more so than any other time in recent history. At the Chernov Team we understand that knowledge is power, and knowledge of the most profitable aspects of the housing market is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.