Since the financial crisis, the housing market has yet to reach the prosperity it once had. But Fox News has reported that U.S. construction spending this year has shown considerable improvement in new housing builds.
According to the Commerce Department, construction spending rose by 1% from September to October, leading to a seasonally adjusted annual rate of more than $1.1 trillion. This is the highest rate since the beginning of the recession in December 2007.
The largest jump in federal construction in nine years is being attributed to gains generated by home building.
Even just the construction of single-family homes and apartments has risen a record of 1% since 2007, leading to around 618,000 single-family housing starts or new homes being built as of March 2015.
With new homes driving more residential development, there has also been a 3% increase in manufacturer’s construction spending, as well as a 19.2% jump in government building.
With such rapidly increased demand, home builders are actually having a tough time keeping up.
According to the Sun Sentinel, subcontractors in South Florida could soon be facing labor and land shortages. The larger, more desirable tracts have mostly been developed, leaving little room left for more single-family construction.
In the desirable Palm Beach County, the Metrostudy research firm reports there were 2,153 housing starts, a 4% decrease from the same period of the previous year. Other in-demand locations such as Broward and Miami-Dade counties only increased to around 1,280 housing starts and a 3% dip to 2,429 starts respectively.
The voracious demand during the peek of the housing market in 2004 and 2005 had builders starting around 2,000 homes a quarter in each of these counties. At its lowest point in 2009, Palm Beach County had only 943 starts, with Broward totaling around 397 starts.
If there was any space available, the home building rates would be skyrocketing.
“You can’t put suburban housing in (Broward) anymore,” said Truly Burton, executive vice president of the Builders Association of South Florida. “The suburbs are finished.”
The demand for newly built homes will likely only continue to increase. How contractors will counteract the lack of space is yet to be seen.