flexiblefullpage -
Currently Reading

Why Housing is Going to Eat the U.S. Economy

Advertisement
billboard -
Economics

Why Housing is Going to Eat the U.S. Economy

The need to more construction workers to satisfy new housing demand over the next five years could siphon employees and capital from other sectors of the economy.


June 7, 2016
Construction site graphic

Just as Facebook, Amazon, Apple, and Microsoft disrupted the economy during the past decade, housing soon will reassert itself as the main driver of the U.S. economy. Indeed, Conor Sen, portfolio manager of New River Investments, writes on his blog that “housing is going to eat the U.S. economy” by taking labor and capital away from other sectors.

The construction industry’s share of total employment stands at 4.6 percent and has risen to at least 5 percent in just about every business cycle. An increase occurring in the near future seems to be a reasonable assumption given that housing and the construction industry has a lot of growth in front of it thanks to the housing needs of Millennials, the potential for huge infrastructure spending by the federal government, and the current dearth in single-family home construction. Meeting that demand would require an additional 550,000 to 600,000 construction workers. This is a problem because we’re already at record lows for construction unemployment.

“To get back to 1990 levels of male unemployment, we would need essentially every single male unemployed worker who finds a job in the coming years to go into construction. This doesn’t take into account skill, desire, educational level, and geography,” writes Sen.

For more about which industries and regions could see their resources pulled to fill the construction worker void, click here to read Sen’s blog.

Tags

Related Stories

Business

November Data: Custom Architects Weigh In, New Construction Trends, Contractor Confidence, and Material Price Changes

We've collected highlights from a number of data reports published throughout the industry in November

Data & Research

October's Data From Around the Industry

In October, we saw reports on remodeling spending, individual septic system installations, and the widespread use of rate buydowns to sell new homes 

Business

Guest Column: What I'm Seeing Out There

Industry expert and advisor Mark Richardson shares stories from the field, from what's changing to what's working 

Data & Research

Guest Column: External Forces

NAHB's chief economist on what lies ahead for the custom home market?

Leadership

14 ways to maximize profits

To be more profitable, custom builders must focus on efficiency and cost savings, while looking for opportunities to publicize their work and expertise.

Business

Pending home sales hit highest point since 2010

The National Association of Realtors reported that pending home sales reached their highest point in nearly two years in January, according to a story on HousingWire.

Business

FHFA begins first transactions of REO rental program

The Federal Housing Finance Agency (FHFA) has begun the first pilot transaction of its program to turn foreclosed Fannie Mae and Freddie Mac homes into rental properties, according to HousingWire.

Business

McIlwain: 3 steps to help the housing market

With the housing market in a lethargic recovery, John K. McIlwain of the Urban Land Institute offers three ways to help revive the market.

Financial

Cleveland mortgage settlement money going toward demolition of vacant houses

A large portion of a multibillion-dollar settlement between the state of Ohio and several large mortgage lenders will go toward demolition of foreclosed, dilapidated houses in the Cleveland area instead of struggling families as intended.

Financial

Rising student debt hampers housing growth

A new report from Bloomberg indicates that first-time homebuyers are having difficulty securing loans thanks to student loan debt totals nearing $1 trillion.

Advertisement
boombox1 -
Advertisement
boombox2 -
Advertisement
boombox3 -
Advertisement
native1 -

More in Category

Business

November Data: Custom Architects Weigh In, New Construction Trends, Contractor Confidence, and Material Price Changes

We've collected highlights from a number of data reports published throughout the industry in November

Data & Research

October's Data From Around the Industry

In October, we saw reports on remodeling spending, individual septic system installations, and the widespread use of rate buydowns to sell new homes 

boombox4 -
Business

Guest Column: What I'm Seeing Out There

Industry expert and advisor Mark Richardson shares stories from the field, from what's changing to what's working 

Data & Research

Guest Column: External Forces

NAHB's chief economist on what lies ahead for the custom home market?

boombox4 -
Advertisement
native2 -
Advertisement
halfpage1 -