Us construction needs to catch up with jobs

The rate of new home construction in the US needs to catch up with job creation, the National Association of Realtors has warned.

The NAR's latest report measured whether new home construction has kept up with job creation to determine the impact of construction on housing supply. The findings reveal that new home construction is currently insufficient in 32 states and the District of Columbia.

The labor market, which is a key to overall economic health, has recovered all of the eight million jobs lost since the recession. Now, though, housing starts must increase to avoid property shortages and affordability issues.

Lawrence Yun, NAR chief economist, comments: “Historically, there’s one new home construction for every one-and-a-half new jobs. Our analysis found that a majority of states are constructing too few homes in relation to local job market conditions. This lack of construction has hamstrung supply and slowed home sales."