Editor’s note: This article was first published in March 2021 and reflects market conditions at that time.
Nobody knew what to expect from real estate when the COVID-19 pandemic began. A year on, the market had surprised almost everyone. People left city apartments for larger homes in the suburbs, investor confidence grew, and builders responded.
By early 2021, new construction had reached some of the highest levels seen in years.
What the numbers showed
According to the U.S. Census Bureau, builders started 5.8% more new homes in December 2020 than in the month before.
Commerce Department figures released on March 1, 2021 showed construction spending rising another 1.7 percent in January, to $1.521 trillion.
Why builders were so busy
Several forces were pushing in the same direction:
- Demand for single-family homes. More people wanted a house of their own, with room for family life and social distancing.
- Low interest rates. Cheaper mortgages brought in buyers who hadn’t been financially ready before.
- Remote work. With no daily commute, settling in the suburbs made sense for more households.
- Low inventory. Many regional markets had few single-family homes for sale, which gave builders and investors good reason to keep building.
Building today
Conditions have changed since 2021, as they always do. Good projects still get financed. If you’re weighing a build, our post on when to consider a construction loan explains how the financing works.
Sachem Lending makes new construction loans to builders and developers, with no upfront fees. Fill out our loan application or contact us to speak with our team.
