As a decade ends, another begins, but that isn't to say there aren't lessons to learn. According to the National Association of Home Builders (NAHB), the 2010s stands out to the construction industry because of the drastic drop in single-family home production, down from 12.3 million units in the 2000s to 6.8 in the 2010s. The decline is even more startling considering single-family home construction averaged just shy of 11 million units since the 1960s. So, what changed?
"While reduced demand in the aftermath of the Great Recession had a large role in holding back home building—particularly in the first half of the decade—the primary causes that contributed to the relative construction weakness over the last 10 years were due to supply-side headwinds and declining housing affordability," NAHB reported.
With limited supplies, home prices increased, making affordability an issue for potential buyers. Other specific problems in the industry included a lack of skilled workers, tariffs on lumber as well as a buildable lots shortage. However, NABH shared the following possible solutions:
• Roll back exclusionary zoning requirements that result in lower housing density;
• Reduce costly impact fees associated with land development and housing construction;
• Allow small lots, small homes and accessory dwelling units;
• Rebuild the industry's infrastructure—the labor force and the reliable sources of lending and building materials; and
• Expedite approvals for affordable projects.
Going forward, NAHB said "there is little doubt that the next generation will experience more single-family construction than the 2010s."
—Andrew Michaels, editorial associate