Total U.S. construction starts for 2019 are projected to be $808 billion, slightly higher than the 2018 estimate of $807 billion, according to a new report by Dodge Data & Analytics.
Robert A. Murray, chief economist for Dodge Data & Analytics, explains that the expansion of the national construction sector has shown a slower growth rate, normal for an expansion period at this stage, telling The Urban Land Institute, “After advancing 11 percent to 14 percent each year from 2012 through 2015, total construction starts climbed 7 percent in both 2016 and 2017, and a 3 percent increase is estimated for 2018." Dodge predicts that single-family housing will see a three percent drop in starts, but no change in terms of dollars. Buyer demand is expected to tick down as rates rise.
“There are, of course, mounting headwinds affecting construction, namely rising interest rates and higher material costs, but for now these have been balanced by the stronger growth for the U.S. economy, some easing of bank lending standards, still-healthy market fundamentals for commercial real estate, and greater state financing for school construction and enhanced federal funding for public works,” says Murray.