2021 Home Building BOOM = 2022 Housing Market CRASH?

Help on the way for the 2021 Housing Market? US Home Builders have pulled building permits for a record number of new homes and apartments. Now the lumber prices have crashed, many builders are turning these permits into housing starts. By the end of 2021 there will be a deluge of new houses and apartments for people to live in. Could this deluge cause the 2021 Housing Market to Crash?

Home builders and apartment developers have pulled permits for 18% more homes and apartments from May 2020-21 compared to May 2019-20. This is well above the typical 4-5% annual increase and assumes that real estate demand in America will grow significantly into 2022.

The biggest nominal increase comes in Texas, where developers have pulled permits for 40k more housing units over the last 12 months. Florida comes in second at 24k. However, in percentage terms, states such as Arizona and Pennsylvania come near the top at 30-40% increases.

The problem? Fundamentals such as jobs, migration, and population growth suggest that the demand might not be there to occupy these units. The US is down over 6 million jobs since early 2020. These job losses are being hidden from the market by the eviction and foreclosure moratoriums, which are both scheduled to end on July 31st.

As the economic realities set in for the real estate market, builders and developers could soon realize that it was a mistake to permit and build so many new housing units. A full deluge of new inventory could be hitting the market by late 2021, especially as the backlog of delayed re-sale listers comes to market.

The end result? A potential Housing Crash of epic proportions.

US Census Bureau Permit Data
https://www.census.gov/construction/bps/

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0:00 Bullish Builders and Developers
1:32 18% Increase in Permits 2020-21
3:48 STATE by STATE Increases
7:13 Arizona Permit Surge: 32%
9:27 Pennsylvania Permit Surge: 43%
10:50 1st Time Ever: Permits Up; Jobs Down
13:05 KEY POINT Missed by Builders
14:27 Backlog of Construction Projects

#HousingCrash #BuildingBoom #HousingBubble