Homebuilding activity is underperforming in roughly two-thirds of measured metro areas and is contributing to the persistent housing shortages and unhealthy price growth seen in many markets.
That’s the main takeaway from NAR Research’s study released earlier this week, which looked at the volume of new home construction in relation to the number of newly employed workers. Historically, the average ratio for the annual change in total workers to single-family permits is 1.6.
Indicating inadequate single-family home construction, through 2014, 72 percent of measured metro areas had a ratio above 1.6.
The markets with the largest disparity of jobs versus home construction (single–family) and currently facing supply shortages are San Jose, Calif., at 22.6; San Francisco, 22.4; San Diego and New York, at 13.9; and Miami, 11.1.
Check out the chart below to find out where home construction stands in relation to jobs in your market.
Note: some of the markets’ (such as Rockford, Ill., Trenton, N.J., and Canton, Ohio,) low level of home construction can be attributed to more moderate gains in employment and adequate vacancies in their existing housing stock.