More housing construction can help increase inventory in Washington, but not always right away and not always evenly across the state. An increase in permits and housing starts is generally a positive signal, yet it can take time for those projects to turn into homes that buyers can actually purchase. That distinction matters here, because national construction data does not always translate into immediate relief for Washington home buyers.
According to a recent report published by the National Association of Home Builders (NAHB), there has been a recent increase in new housing construction nationwide. Could this mean we could see a much-needed uptick in new-home construction in the future?
This trend is keeping pace with what we are currently seeing across the entire nation, though builder confidence hasn’t changed since the same time last year.
A lot of this growth has been seen in the western half of the U.S., including Washington State.
In the state of Washington, the rise of housing construction could be a good sign for the state’s housing market, particularly as it relates to inventory. Real estate markets across Washington have suffered from ongoing inventory shortages in recent years. There just aren’t enough homes listed for sale to satisfy the demand from buyers. Things are tight for renters, as well.
More housing construction could eventually help ease some of that pressure by adding supply over time.
NAHB has also reported an increase in the number of permits for multi-family home construction. These are units that house more than one family or owner, like duplexes and triplexes.
The NAHB conducts a survey every month, which it has been doing for more than 40 years. The NAHB/Wells Fargo Housing Market Index measures builder forecasts of single-family home sales as well as sales expectations over the next six months.
Of course, there can be a lengthy lag time between the issuing of a building permit and the completion of the construction project. So the recent uptick in permits might not make an impact on Washington’s tight housing markets for some time. But it’s good to see there might be some relief down the road.
Our current issues with housing inventory can be traced back to the housing and economic crisis that began in 2008. Across the U.S., new-home construction slowed considerably during and following the Great Recession. And while the industry has ramped back up since then, there is still a shortage of available homes in many areas.
This has led to a kind of “limbo” situation in many real estate markets, including those in Washington State. Homeowners who are otherwise ready to sell are reluctant to list their homes, out of fear that they won’t be able to find anything else to buy. This makes it harder for buyers to find a suitable property.
Housing inventory has been especially constrained in the Seattle metro area, including Seattle, Tacoma and Bellevue.
Related: Tacoma housing outlook for 2022
So any signs that there might be more inventory coming onto the market in Washington’s real estate markets could be seen as good news — especially for those planning to buy a home in the near future.
Recent Northwest MLS figures have pointed to limited housing supply across parts of Washington.
King County, Washington has seen a marked drop in supply of homes. Along with rapid price appreciation, inventory continues to get squeezed tighter and tighter in this County. There is a very high demand for housing, which continues to struggle to keep up.
So it seems as though despite there being a healthy amount of housing construction, there are still parts of the State of Washington that continue to experience a tight shortage of housing inventory, especially in places like King County.
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Housing inventory has remained tight for several reasons. New-home construction slowed during and after the 2008 housing and economic crisis, and many markets still have not fully caught up. In Washington, strong buyer demand and hesitant sellers have added to the problem, because some owners do not want to list their homes if they are unsure they can find another one to buy.
More housing construction is generally a positive sign because it can add supply over time. But it does not always create immediate relief for Washington buyers. New permits and housing starts must still move through construction and completion before those homes can be purchased.
There can be a meaningful lag between a building permit being issued and a home becoming available for sale. The timeline varies by project, but the key point is that permit growth does not translate into instant inventory. That is why tight housing conditions can continue even when construction activity rises.
Inventory can stay tight because demand may still outpace new supply, especially in high-demand parts of Washington. Also, many projects are still under construction and not yet available to buyers. In some areas, homeowners are also reluctant to sell, which further limits the number of listings on the market.
Not necessarily. More construction can help reduce supply pressure over time, which may support a healthier market, but it does not guarantee lower home prices. If demand remains very strong and inventory is still limited, prices can continue to face upward pressure even as new homes are being built.
They can help the broader housing market by adding overall housing supply. More duplexes, triplexes, and other multifamily units may ease some pressure on renters and buyers over time. But they do not directly replace single-family homes, so the effect on single-family buyers may be more gradual and indirect.
The main takeaway is that rising construction activity could eventually bring some relief to Washington’s inventory shortage, but not right away and not evenly across the state. Areas with especially strong demand, such as parts of the Seattle metro area and King County, may continue to feel supply pressure even if construction remains active.
It can vary by location. The article notes especially tight inventory in the Seattle metro area, including Seattle, Tacoma, and Bellevue, as well as King County. New construction may help some submarkets sooner than others, but relief is unlikely to appear evenly across all urban and suburban areas at the same time.
Nationally, recent NAHB data showed an increase in permits and construction activity, which is a constructive sign. But that broader U.S. trend does not automatically create immediate relief for Washington buyers. Local inventory conditions still depend on how quickly homes are completed and how strong demand remains in specific Washington markets.
The article does not give a specific number of months, but it makes clear that current inventory in many Washington markets is well below what buyers would consider comfortable. The practical takeaway is that limited listings, strong demand, and slow supply growth have created a market where available homes remain scarce.
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