The latest report from Dodge Data & Analytics shows that construction starts in the metropolitan statistical area of Chicago-Naperville-Joliet are up from last year, with residential construction starts in the area totaling $547.996 million.
This number represents a 4 percent increase since March of 2015 ($526.442 million). For nonresidential construction, the numbers dropped considerably since 2015: Last year, the area had $325.264 million, but dropped to $271.616 million this year — a 16 percent decrease.
“In 2015, nationwide single-family housing construction was up 10 percent,” said Dr. Robert Dietz, chief economist and senior vice president for economics and housing policy for the National Association of Home Builders. “We’re forecasting a little faster growth in 2016. Maybe 14 percent.”
[graphiq id=”60iclWFYgSx” title=”Mortgage Costs in Chicago, IL” width=”600″ height=”514″ url=”https://w.graphiq.com/w/60iclWFYgSx” link=”http://places.findthehome.com/l/32868/Chicago-IL” link_text=”Mortgage Costs in Chicago, IL | FindTheHome” ]
Dietz referenced NAHB’s Leading Market Index (LMI) when talking specifically about Chicago and other midwest markets. He said that given Chicagoland’s low ranking on the list — which is to say it’s below the normal levels of economic growth — it makes sense that growth within the residential sector is happening.
He also pointed out that, historically, roughly 30 percent of newly constructed residences are sold to first-time buyers. That statistic has dropped to below 20 percent.
“Population growth is a challenge for local markets, and a market like Chicago, [there is] land-use controls, minimum lot size, zoning rules … these get embedded into the cost of developing lots,” he said. “Lot supplies are low in a lot of markets. You can’t build a home unless you’ve got land that’s been developed and is ready to enter that pipeline. I think that is an issue in Chicago.”
The statistical area under examination includes the following counties from Indiana, Wisconsin and Illinois: Cook, De Kalb, Du Page, Grundy, Jasper, Kane, Kendall, Kenosha, Lake, McHenry, Newton, Porter.
Overall, new residential construction starts in America increased 3 percent.
