Report: Michigan Homebuilders Association Expects Home Construction to Increase 1 Percent in 2018


Using an econometric model, the Homebuilders Association of Michigan (HBAM) in Lansing today announced their expectation that single-family home construction will rise by 1 percent in 2018. HBAM projects that 16,918 new single-family home permits will be issued statewide, and 2017 production levels are expected to reach 16,756 new single-unit family homes by year end, the highest level since 2006.

“While homebuilders expect demand for new home construction to continue to grow, the industry is constrained by a lack of workers, limited lot availability, and inconsistent development rules across the state,” says Bob Filka, HBAM’s CEO. “This, combined with anticipated oil price increases and North American vehicle production decreases, resulted in our flat forecast for 2018.

“Even if we see more job growth diversification and stronger performance in the automotive sector in 2018, the likelihood that home production can rise much higher than 17,000 units will be virtually impossible without an influx of workers to our industry.”

Southeast Michigan builder and incoming 2018 HBAM president Lynne Pratt adds that rising construction costs and limited labor have forced the industry to delay or turn down development projects in many regions of the state.

“Construction costs are rising and with limited labor and other factors, many vitally important types of housing stock are not being built,” says Pratt. “This should concern local government and economic development officials who are seeing a growing scarcity of worker housing options in their communities.”

After hosting a series of housing summits throughout Michigan earlier this year, HBAM created a report warning of a looming housing shortage. The association proposed a 13-point action plan to address the situation, and several workforce development recommendations are currently being acted on.

“We are seeing more and more community leaders recognize that the housing industry and marketplace have dramatically changed,” adds Filka. “This forecast and our earlier report underscore the need for continued action and dialogue about housing investment in our state.”

A full copy of the report can be found here.

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