Zillow’s Matthew Speakman on next year’s homebuilding market

Zillow Economist Matthew Speakman discusses the U.S. Census Bureau’s latest housing starts report, which shows the number of single-family homes built in September reached the highest level since 2007. Additionally, Speakman discusses next year’s homebuilding market, which he projects will strengthen as the nation’s homebuilders continue to show signs of optimism.

Below is just one question and answer from the interview. Be sure to watch the full interview above to hear Matthew Speakman’s full insight on the home-building market.

HW: Reports now show that the nation is heading towards another uptick in COVID-19 cases, which is likely to impact the job market. Do you believe the Coronavirus is likely to dampen the homebuilding market further this year despite demand?

Matthew Speakman: First of all, the rise in cases is, of course, very concerning. Seeing signals from both within the United States and overseas are a reminder of how devastating this virus can be and the impact it can have on the economy, making things just shut down very quickly. I think in terms of homebuilding, it’s safe to say that the pandemic and rising case volumes will have an impact on the sector, just like it would in any other industry. But, as I mentioned before, builder confidence right now is so high, and there’s a lot of evidence that shows that construction activity is actually lagging behind that confidence.

Part of that is due to pandemic driven constraints, things like supply shortages, supply chain mishaps, delayed processing time for permits and things like that. But, I do think that there’s still a lot of potential and upward momentum in the home construction space going forward. Even with the rise in cases, builders and home construction in the industry has been kind of constrained by a lot of things leading up to the pandemic, like labor shortages and land prices. As long as home construction remains an essential service and the pandemic doesn’t force things to completely shut down, I don’t think building activity should lose too much momentum going forward, even as cases rise the way they are right now.