Annual Homebuilders Housing Forecast Calls for Modest 3 Per Cent Growth in Single Family Home Permits in 2019

The Home Builders Association of Michigan (HBAM) announced that they expect single-family new home construction to rise by just 3 percent in the coming year. For calendar year 2019, HBAM’s econometric model estimates that 17,552 new single-family home permits will be issued across Michigan. The state’s largest construction industry trade association also noted that 2018 production levels should reach 16,999 new single-family homes by year end—the highest level since 2006.

“While it is encouraging to note that we are at the highest levels in 12 years, the low, single digit percentage increases mean that Michigan’s critical housing industry is lagging behind general economic growth in our state,” noted HBA Michigan CEO Bob Filka. “The 17,000 plus units we expect to build next year is well behind our historical highs, and well behind the 26-28,000 units that economists say we should be building to meet long term housing demand in Michigan.”

The modest 3 per cent growth forecast reflects national economists’ projections for a likely slowdown of North American Vehicle Production and an expected increase in oil prices, both critical factors in the HBAM econometric model. Though not explicitly part of the HBAM model, shortages in the number of available construction workers contributes to the likelihood that single family home construction will be able to rise above forecasted levels.

“Builders continue to be plagued not only by a lack of skilled workers, but by a shortage of buildable lots and inconsistent and burdensome government regulations—which represent about 25 per cent of the cost of a new home,” said Filka. “The factors combine to not only drive up the cost of new home construction, but are also forcing more and more middle-class families to the sidelines as they are unable to afford to participate in the American Dream of owning a new home.”

HBAM has warned of a looming housing shortage in Michigan when in 2017 it issued a proposed 13-point action plan to aggressively attack challenges faced by the industry. Copies of the HBAM report, “Housing Challenges Threaten Our Economic Growth—Where Will Ten Million Michiganders Live?” can be downloaded at