While Michigan’s housing market is on the upswing, it still falls behind most of the country, said David Crowe, chief economist of the National Association of Homebuilders.
During the Southeastern Michigan Homebuilders Association’s annual economic forecast on Wednesday, Crowe explained that by the end of 2015, the national average for housing starts will reach 93 percent of normal, based on the annual average from 2000-2003. In comparison, Michigan will fall just below 70 percent of normal production by that time.
“It is going to take longer for Michigan to recover versus other states,” said Crowe, noting that Michigan’s unemployment rate is also higher compared to other states. “Detroit is still at an all-time high, but you guys were in a deeper hole than others.”
Overall, the state’s housing market has improved, Crowe says. With consumer confidence at pre-recession levels, along with pent-up demand, new-home construction grew 24 percent last year. For Detroit, specifically, housing starts grew 28 percent.
Crowe attributes the growth to stronger household balance sheets and more disposable income.
Although conditions are improving, concerns from builders are beginning to take shape. In fact, 81 percent of builders believe prices for building materials could increase this year, in comparison to 33 percent in 2011. Likewise, 65 percent expect to face issues with cost/availability of labor, and 55 percent expect to have concerns with cost/availability of developed lots this year.