Construction Trends for 2016 & predictions for 2017

December 19, 2016 | Caroline Auger

Last year, TriForce was predicting the continuation of slow and steady industry growth in 2016.

Here is what it looks like.

According to the  US Census bureau’s News release of December 1st, “During the first 10 months of this year, construction spending amounted to $972.2 billion, 4.5 percent (±1.0%) above the $930.7 billion for the same period in 2015.”

More good news according to the Census bureau, residential construction continues its steady climb with a recent spike in October.

Things are tough from the homebuyer’s perspective.  Rising rents are keeping many people from being able to save enough to put a down payment on a house.

Lack of inventory continues to push up home prices. All this while the median income is still 1.6% below what it was in 2007!

But now, some cities are stepping in to help, with inclusionary zoning that requires builders to incorporate a percentage of affordable housing in their projects.

Still, home ownership, forever equated with the American dream, hovers close to a 50- year low (a record set last July).

The NAHB estimates regulatory costs for a new home at 25% by the NAHB. Can the new US administration help reduce this percentage? There has been talk, but no real statement on it yet. Most regulation is at the local level. Can the government deliver on deregulation? We don’t think this will happen within the next year, at least.

There was continued strong growth in multi-family development last year. Since the recession, conditions have made it easier for builders and developers to complete multifamily projects than single home ones. For one, builders weren’t getting enough access to credit for single-family developments. That’s because banks had been favoring multifamily projects, which were considered safer and more profitable. This trend might be reversed in some overdeveloped areas such as Florida, where banks are tightening their lending conditions for multifamily developments.

Some construction trends have been present every year since 2007 is the search for value. Builders are constantly looking for better, more efficient and more profitable ways to complete their projects. For example, 2015 saw the rise of interest in BIM (Building Information Modelling). Manufactured homes, seen by some as models of efficient building have been steadily increasing in sales over the past 4 years, according to the US census bureau.