There may be a construction boom, but builders still have a lot of ground to make up from a decade of underbuilding, according to a new report from Zillow. Builder efforts are hampered by continued supply chain disruptions and labor shortages.
When comparing new construction to population growth, nationally, construction has fallen short of 1.35 million units since the Great Recession in 35 of the largest U.S. markets. That would be the equivalent of no new homes being built in the respective markets for 2.7 years.
The implications are seen across the country, as home prices continue to rise and limited inventory drives price growth. Single-family home appreciation has grown more than any other type of home, having risen 47.9% since January 2008, the report found.
“Builders in recent months have put the pedal to the metal to get new homes up and meet a rush of demand, and we just saw the first full year of above-average construction since the mid-2000s housing crash,” Zillow senior economist Jeff Tucker said in a press release. “This isn’t a new boom cycle of new construction so much as it’s an attempt to get even from the last bust. There is still a long way to go to catch up from more than a decade of slow construction, and some markets have longer to go than others.”
Chicago was one of nine metros that had a surplus of new single-family construction homes — 73,467.
Chicago home prices were up 6% from the 2007 housing crash, and October’s typical home value was $286,280.