The US economy is showing perfect conditions for more housing construction in 2015. The growing economy, lower mortgage rates, ever increasing household formation and increasing demand for hosing creates fertile ground for new housing constructions. The disappointment that the country experienced at the end of last year when we add up all the units constructed in 2014 is another reason to expect a booming 2015 for new housing construction.
What will dampen our hopes moving forward? Any increase in mortgage interest rates and housing price appreciation are two main concerns. Home prices traditionally appreciate by five to six percent in boom years. However, population increase including migration should create a solid demand to overcome any price appreciation or expected slight increases in mortgage rates. In 2011 alone, household formation increased by 2.03 percent. The National Association of Home Builders forecasted 991,000 for 2014 compared with the 2013 new construction total of 930,000 for the whole year. New housing constructions are improving slowly but steadily from the lows it hit several years ago. Not just the single family homes, more multi-family units are also expected to be built in 2015. Level of construction may see doubling of the rate experienced in 2009 and 2010.