Sep
21

MIT Professor Says Home Construction to Make Big Comeback

By
– Valuation Review

An MIT professor is bucking current predictions for the home-construction market and suggesting that construction will not only rise, but also stay high for a while, a performance that runs contrary to what followed previous economic recoveries.

William C. Wheaton, professor with the Department of Economics, MIT Center for Real Estate, said today’s rate of residential construction is historically low and demand will ultimately exceed the level of building going on. This will set the stage for a return to vibrancy in the housing construction market.

Housing construction could be the driving force behind America’s economic growth over the next few years, according to Wheaton. Residential investment as a share of GDP is relatively small, averaging about 3 to 4 percent. But given the lack of building going on at the moment, it is plausible housing construction could add an average of 0.7 percent to GDP growth per year over five years.

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