Hello Readers, in Print and Online,
As we enter into the final part of summer with our August issue of Builder and Developer, I am impressed with where we stand as an industry. Builder confidence was healthy in July according to the National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI). The Index reading is 68; an above-50 reading indicates more builders have a positive outlook as opposed to a negative one – though you all know this.
“Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country,” said Randy Noel, chairman of the NAHB, in a statement. “Builders are encouraged by growing housing demand, but they continue to be burdened by rising construction material costs,” said Robert Dietz, chief economist at the NAHB. “Builders need to manage these cost increases as they strive to provide competitively-priced homes, especially as more first-time homebuyers enter the housing market.”
Since we touched on the Millennial market in this issue – and of course the Boomer market, because you can’t talk about one without discussing the other – we recognize that the Millennials moving into the housing market will be a big change. The biggest demographic of the Millennials will just now be entering their 30’s within the next couple of years and will finally be ready to purchase their first home.
Maybe they will skip their starter home, maybe they won’t, maybe they’ll want open floor plans and high vaulted ceilings, or maybe they won’t. What we do know is that they will change and activate the market in a big way. Millennials, almost 80 million strong, are the largest U.S. generation to ever live. It is important to consider this market, and make the necessary preparations. However, ignoring the “Silver Tsunami” of 76 million Baby Boomers as David Wolf so kindly points out in his article on page 68, would be an opportunity missed.
These numbers are huge – these are demographics that will be actively looking for a certain kind of housing, and I am confident that we, as an industry, can provide. I am not worried about the housing market – not with numbers like those – and I predict, based off of sheer demographic numbers, that builder confidence will continue to be high and the market will continue to steadily develop.
Continue to work hard, prepare for the tide that is Millennials, and get your design teams ready, because we are going to have a busy couple of years.
Until next time,