This paper reviews the residential construction industry’s distant and recent past, surveys current trends, and sketches out potential fundamental shifts in future housing demand and supply as they affect the residential construction industry.
In the heady days of the early 2000s, the U.S. homebuilding and remodeling industry achieved unprecedented levels of production. Consumers’ intensifying reliance on homes as financial assets spurred an ever-expanding demand for new and remodeled housing. At the same time, financial and technological investments in the homebuilding industry transformed the operations and structure of homebuilders, remodelers, material suppliers and related sectors involved in every aspect of housing construction.
The Great Recession curtailed the demand and revenue that led to the industry’s growth, but the verdict is still out on whether the structural changes seen in the boom years were temporary. The persistent housing downturn muddled the arrival of a clear new future direction for the homebuilding industry. While key players in the industry are waiting for the economy to recover and housing-related policies to be settled, one question arises repeatedly: what will the future industry look like?