New construction in the United States is an important economic indicator that investors regularly use to draw conclusions about the strength of the economy. Every month, around the 17th, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly issue the New Residential Construction Report. The strength of the housing market correlates with the status of many other consumer goods, like new furniture and other household items that often go hand in hand with a move. The ‘housing starts’ report, as it is frequently called, is indicative of overall economic stability and these three cities topped last year’s list.
3. New York
It should come as no surprise that the financial capital of the world makes this list. The engine of capitalism continues to hum along as more and more individuals, especially young people, continue to flock to the big apple. As a result, the density of the city is compounding. In areas like Brooklyn and the Bronx, smaller buildings are regularly torn down to make way for massive skyscrapers to house the burgeoning population. Not everyone is pleased with the buildup, of course. Last year saw more noise complaints to the City’s 311 number than any other year, and this year is already well on its way to breaking that record. There are also complaints, which often develop into lawsuits, over the destruction of public space, lost views, and safety. Still, as long as there is a market for apartments in New York, and it doesn’t look like the demand is going away any time soon, developers will continue to use every bit of space available.
Dallas itself is booming, but the real boomtown for new construction is the entire Dallas-Fort Worth metropolitan area. Plano, Texas, which is a short drive from downtown Dallas, is poised to be the new North American headquarters of a major car manufacturer, and Frisco is the fastest growing town in the United States. Dallas, like many of the state’s cities, is benefiting from Texas’ business-friendly tax code that has enticed 21 Fortune 500 companies to the state. Texas is no stranger to the boom and bust cycle. In the early 1980s, oil fortunes brought unprecedented opulence, but the wheel spun back around at the beginning of the millennium. Many people are concerned that the long-term effects of the tax cuts will come back to hurt the city as low tax rates weaken infrastructure and schools lack long-term funding. For now, however, Dallas is in business.
For many of the same reasons as Dallas, Houston has weathered the recession and come out on top. There was more new construction in Houston than any other city. As it was in the lone star state of old, Houston’s fortunes have been spurred on by the petrochemical industry. The shale oil boom has brought back a wildcat mentality. The infrastructure and companies have been in place since the 1970s, but oil companies, and especially gas companies, are putting up record profits and hiring more people for higher paying jobs.
New construction is not the end all be all, but it is a pretty reliable indicator of prosperity. These three cities are at the top of the list.