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The US residential market is witnessing growth despite the COVID outbreak, as demand for bigger homes, and second homes continues to increase. Also, millennials are now focusing on homeownership and moving out of rental homes which are pushing the US residential market growth. Moreover, low mortgage rates have motivated individuals to buy homes. Also, home prices have increased across the US during Q3’2020 as Americans are view their homes as something more as they spend more time at home due to the pandemic.
The overall residential spending in the US grew by 14.6% YoY from US$ 563.9B in 2019 to US$646.1B in October 2020. Of this majority of spend was on private residential construction (98.6%), and the remaining was on public residential construction. The US residential private construction spending increased by 14.5% from US$556.7B in October 2019 to US$637.1B in October 2020, with around 50.9% of spending from new single family construction and the remaining spending from new multifamily construction.
Though due to COVID-19, the sales of new privately-owned houses declined from March to June 2020, the market began to recover in July 2020 with sales reaching 979,000 as compared to 612,000 in March 2020, as per according to U.S. Census Bureau and the U.S. Department of Housing and Urban Development estimates. Further, new privately-owned houses sold in the US increased YoY by 41.5% to 999,000 in October 2020, with highest sales recorded in the South (580,000).
Moreover, privately-owned housing completions reached 1,343,000 in October 2020 an increase of 5.4% over October 2019. Privately-owned housing starts improved by 14.2% YoY to reach 1,530,000 in October 2020, reflecting increase in demand from customers.
As investments on homes are one of the most important decisions which can have an impact on individuals, there has been a growing focus on green and sustainable homes. To cater to this demand, industry players are focusing on building sustainable homes which can improve the quality of life of individuals. As per U.S. Green Building Council (USGBC) report, there has been a growth in green and Leadership in Energy and Environmental Design (LEED)-certified homes from 19% since 2017 reaching nearly 500,000 units of single family, multifamily and affordable housing LEED-certified homes globally and over 400,000 units in the U.S.
Also, among the top 10 states for LEED certified homes, California stood first with about 40,000 certified residential units, followed by Texas (24,500). LEED-certified homes on an average use 20 to 30% less energy as compared to a traditional home, with some owners revealing upto 60% savings. Going forward, the construction of green multifamily and single-family homes is expected to increase as individuals focus on sustainable living.
Moreover, there has been renewed interest in modular construction and expected to grow in the coming quarters, owing to their lower cost and increased productivity. To take advantage of this trend, start-ups are trying to enter the market. Some of the popular start-ups in the modular construction industry include Plant Prefab and Blokable.
