A majority of experts agree the construction industry is on the mend, with modest positive growth expected in certain sub-industries, as noted by John Crum, of Wells Fargo Equipment Finance Construction Group. Equipment sales, for example, have generally risen over the last year in many regions of the country.
Nonetheless, industry insiders are keeping a watchful eye on the European economy, since the U.S. economy is not yet strong enough to be unaffected by negative swings in other large markets.
Residential construction holds the most promise, since the strongest growth so far has been in the foundational elements of new home construction. Home building is a fairly predictable process as one stage of construction leads to the next. Based on the growth in the demand for heavy equipment sales and rental, which is necessary for development, site prep, and foundation work, residential construction is expected to post significant gains in 2013 and 2014.
Other factors contribute to a favorable outlook for residential construction, including stabilizing property values and fewer distressed home sales. Persistently low mortgage rates certainly don’t hurt, either.
U.S. Department of Commerce statistics reinforce the residential construction recovery. Multi-family construction grew by 11.9 percent in October 2012, due in part to the fact that inventories of new homes are near 50-year lows. The Wells Fargo Economics team expects single-family starts to rise 28.3 percent in 2013 and an additional 29.2 percent in 2014. New homes need new household goods and furnishing, so the residential construction growth is expected to spur growth in retail development.
Despite the compliance challenges presented by the Dodd-Frank Wall Street Reform legislation, much of which is slated to take effect soon, the expected growth in residential construction may justify expanding or at least continuing to offer residential construction loan and mortgage products into 2014.
Glass & Goldberg represents a full spectrum of industries, including banks, funding sources, equipment lessors and lenders, motors vehicle and aircraft lessors and lenders, commercial finance companies, real estate owners and lenders, asset-based lenders and factors, with particular emphasis in financial service industry law.
If you are a bank or other lender wondering how to balance new compliance requirements with an expanding residential mortgage market, the attorneys at Glass & Goldberg can help. We provide high quality, cost-effective legal services and advice for clients in all aspects of business litigation and transactional law. Call us at (818) 888-2220, email us at email@example.com, or visit us on the web at www.glassgoldberg.com to learn more about the firm and to sign up for future newsletters.