August 14, 2013 – According to NFIB’s chief economist Bill Dunkelberg, there is a light in sight at the end of the dark housing-market tunnel.
Since 2008 when the housing market was at its lowest, new “starts” are finally gaining momentum with a projected annual rate of 900,000 in 2013.
While this is an improvement over the 600,000 new starts in 2008, it still falls short of the needed new start rate. The needed rate, which is based on population growth and deletions from housing stock, is now at 1.6 million.
So what is causing the shortage in starts? Dunkelberg’s reasoning is twofold:
- The population has grown to absorb excess homes.
- Small construction firms are emerging very slowly from the previous housing market collapse.
Furthermore, there is no definite time projection for when small businesses in the housing market will re-enter.
“The National Association of Homeowners reports nearly 50% of builders are having trouble assembling construction crews, so in the short term, demand will outpace supply,” says Dunkelberg.
Thankfully, historically low mortgage rates will continue to drive sales and offer relief for small businesses dominating the home-building industry—even if the economy as a whole is slow to recover.
About Your Bottom Line with Bill Dunkelberg
NFIB’s web series, Your Bottom Line With Bill Dunkelberg, helps small business owners learn more about what drives the economy and how economic issues affect their businesses. William Dunkelberg, NFIB’s chief economist and one of the nation’s top experts on small business, entrepreneurship, consumer behavior and consumer credit policy, hosts the series.
About NFIB
NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through a unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of members to own, operate and grow their businesses. For more information visit www.nfib.com.
About William Dunkelberg
William C. Dunkelberg has been chief economist for NFIB since 1971. He is currently professor of Economics at the School of Business and Management, Temple University, and served as dean from 1987-94. He was director of the Center for the Advancement and Study of Entrepreneurship from 1991-94.
Dunkelberg is a nationally recognized authority on small business, entrepreneurship, consumer behavior and consumer credit policy. He has been an advisor to cabinet officers, a member of the Consumer Advisory Council of the Federal Reserve System and is a past president of the National Association of Business Economists. He has chaired the Census Advisory Committee and is an elected member of the Conference of Business Economists and the National Economic Issues Council. He is also a frequent contributor to broadcast and cable news programs and is often quoted in leading newspapers and magazines.
