Requesting a retroactive extension of the 9% credit rate for the Low Income Housing Tax Credit as well as an extension to the credit for energy efficient building measures both for remodelers as well as new home construction, Robert Dietz, economist for the National Association of Home Builders (NAHB), addressed Congress regarding the phenomenal growth in the housing industry over the last 2.5 years which directly contributed to the GDP of the United States. Dietz also strongly emphasized the effect of government regulation of the home building industry and encouraged the retention of the mortgage deduction program as well as continuing with the Low Income Housing Tax Credit – currently the only housing program in place for low income families to get any type of government assistance.
274,000 jobs have been added in the real estate industry both directly with jobs for carpenters, electricians, framers, and plumbers, and peripherally in segments such as manufacturing, retail, wholesale, and transportation of materials. The National Association of Home Builders presented the following statistics based on the construction of approximately 1,000 homes and its direct impact on the housing market in today’s economy. Currently, the home building industry comprises 15.5% of the GDP, but a healthy margin for real estate is actually between 17% – 18%.
Information regarding building an average of 1,000 single-family homes:
• Creates 2,970 full-time jobs
• Brings in $162 million in wages
• Merits $118 million in business income
• Achieves $111 million in taxes and revenue for state, local and federal governments
“In April alone, home builders and remodelers added 13,100 jobs,” Dietz said. He predicts a growth in the housing industry in 2014 of 22% bringing the number of new, single-family homes to 760,000. He also said that the multi-family market (apartments and rentals) should grow by 6% to 326,000 units. Surprisingly, the multi-family market also represents a large economic force by creating 1,130 jobs for an average of 1,000 new units built, including those units designation for the Low Income Housing Tax Credit. Additionally, 890 jobs are created by an average of $100 million in remodeling costs, according to NAHB statistics.
The future outlook for the new home and multi-family home industry shows that 2014 should reflect housing starts of over 1 million, and Dietz predicts that housing starts over the next few years should rise to around 1.7 million homes. This is good news for homeowners nationwide as statistics show that most middle class families have most of their equity / wealth wrapped up in their real estate holdings. 62% of household assets are wrapped up in homeownership, and that same ownership reflects 42% of their wealth. Approximately 67% of Americans own a home while only 50% have a retirement account and 16% have stocks and bonds.
The message to Congress from the NAHB was told loud and clear that the real estate market directly affects the United States’ economy as well as its citizens’ assets. Many markets nationwide are seeing a slow and steady growth in the construction of single-family homes as well as a reduction of the amount of homes available on the market for sale. At Bedico Creek Preserve in St. Tammany Parish, we are experiencing phenomenal growth both in the sale of our New Homes for Sale as well as our New Lots for Sale. If you haven’t had a chance to visit our master-planned community, Contact Us at 985-845-4200 or E-mail Info@LiveBedico.com. We would love to show you around our new home habitat!