Is U.S. Housing on the Rocks or Pausing on the High Ground?
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History shows that so far, the industry has worked around many challenges and is poised to take advantage of the next big break.
Are we at the end of history? The beginning a major recession? The golden age of AI-driven innovation? A national housing collapse? If your head’s spinning, you’re not alone. But remember, predictions about the future notoriously misfire. Do you remember these notorious prognostications?
Television won’t last. In 1946, film mogul Darryl F. Zanuck of 20th Century Fox said, “the public won’t stand for staring at a plywood box every night.” (elon.edu)
Computers for home use won’t catch on. In 1977, Ken Olsen, founder and CEO of Digital Equipment Corporation, quipped, “There is no reason for any individual to have a computer in his home.” (snopes.com)
The world will run out of oil by the 1970s. In 1956, geologist M. King Hubbert predicted that United States oil production would peak between 1965 and 1970. (M. King Hubbert –Wikipediaen.wikipedia.org)
Nuclear energy will solve all of our problems. By the mid-1960s, the U.S. Atomic Energy Commission anticipated there would be more than 1,000 commercial reactors supplying electricity in the United States by the year 2000—a forecast that never materialized. (Nuclear power in the United States – Wikipediaen.wikipedia.org)
I’d like to zero in on housing predictions. The clickbait is dire: “Housing Market Collapsing!” “Florida Market in Freefall!” “Desperate Builders Offer 1 Percent Financing!”
In the real world, industry pros are concerned, yes, but not hysterical. For example, Paul Romanowski, CEO of D.R. Horton, told Reuters this spring that sales were off due to weaker consumer confidence and other factors. But he didn’t gnash his teeth and tear out his hair.
We all know that builders face a trifecta of challenges: supply chain issues, labor shortages and persistently high interest rates.
But we’re seeing smart companies find ways to overcome these obstacles. For example, Green Builder is working with two builders this year to develop new communities using factory-built modules and panels to solve labor problems. They’ll be part of our VISION House series in coming months.
It’s true that builders are stepping up amenities and in-house financing, but they’re not extreme changes. Most deals merely sweeten the buyer’s borrowing rate by a point or two lower. Also, we’ve seen many firms pivot smoothly to multifamily and rental projects, which are often easier to finance than for-sale properties.
Rather than describe the housing market as “teetering,” you might look at it as poised for rapid growth. All that’s needed is to pull one lever to change the game. A drop in interest rates, for instance, could quickly clear out excess inventory. Also, while other industries may lose a big part of their labor force to AI in coming years, construction is already short-handed. More homes and components built in factories are unlikely to steal jobs from the trades, but may ease the labor woes for project managers.
Where’s sustainability in all this? Embedded in the process. Codes, rising utility costs and extreme weather are pushing the envelope organically. Homes are simply being built better to meet real-world challenges.
Veteran journalist Matt Power has reported on innovation and sustainability in housing for nearly three decades. An award-winning writer, editor, and filmmaker, he has a long history of asking hard questions and adding depth and context as he unfolds complex issues.
Is U.S. Housing on the Rocks or Pausing on the High Ground?
History shows that so far, the industry has worked around many challenges and is poised to take advantage of the next big break.
Are we at the end of history? The beginning a major recession? The golden age of AI-driven innovation? A national housing collapse? If your head’s spinning, you’re not alone. But remember, predictions about the future notoriously misfire. Do you remember these notorious prognostications?
Television won’t last. In 1946, film mogul Darryl F. Zanuck of 20th Century Fox said, “the public won’t stand for staring at a plywood box every night.” (elon.edu)
Computers for home use won’t catch on. In 1977, Ken Olsen, founder and CEO of Digital Equipment Corporation, quipped, “There is no reason for any individual to have a computer in his home.” (snopes.com)
The world will run out of oil by the 1970s. In 1956, geologist M. King Hubbert predicted that United States oil production would peak between 1965 and 1970. (M. King Hubbert –Wikipediaen.wikipedia.org)
Nuclear energy will solve all of our problems. By the mid-1960s, the U.S. Atomic Energy Commission anticipated there would be more than 1,000 commercial reactors supplying electricity in the United States by the year 2000—a forecast that never materialized. (Nuclear power in the United States – Wikipediaen.wikipedia.org)
I’d like to zero in on housing predictions. The clickbait is dire: “Housing Market Collapsing!” “Florida Market in Freefall!” “Desperate Builders Offer 1 Percent Financing!”
In the real world, industry pros are concerned, yes, but not hysterical. For example, Paul Romanowski, CEO of D.R. Horton, told Reuters this spring that sales were off due to weaker consumer confidence and other factors. But he didn’t gnash his teeth and tear out his hair.
We all know that builders face a trifecta of challenges: supply chain issues, labor shortages and persistently high interest rates.
But we’re seeing smart companies find ways to overcome these obstacles. For example, Green Builder is working with two builders this year to develop new communities using factory-built modules and panels to solve labor problems. They’ll be part of our VISION House series in coming months.
It’s true that builders are stepping up amenities and in-house financing, but they’re not extreme changes. Most deals merely sweeten the buyer’s borrowing rate by a point or two lower. Also, we’ve seen many firms pivot smoothly to multifamily and rental projects, which are often easier to finance than for-sale properties.
Rather than describe the housing market as “teetering,” you might look at it as poised for rapid growth. All that’s needed is to pull one lever to change the game. A drop in interest rates, for instance, could quickly clear out excess inventory. Also, while other industries may lose a big part of their labor force to AI in coming years, construction is already short-handed. More homes and components built in factories are unlikely to steal jobs from the trades, but may ease the labor woes for project managers.
Where’s sustainability in all this? Embedded in the process. Codes, rising utility costs and extreme weather are pushing the envelope organically. Homes are simply being built better to meet real-world challenges.
By Matt Power, Editor-In-Chief
Veteran journalist Matt Power has reported on innovation and sustainability in housing for nearly three decades. An award-winning writer, editor, and filmmaker, he has a long history of asking hard questions and adding depth and context as he unfolds complex issues.Also Read