In the forecast, housing starts rise to 1.43 million this year, 1.38 million in 2025, and 1.39 million in 2026. This is a higher level than what was recorded between 2007 and 2019.

Home prices ignited unexpectedly in the first quarter — the Federal Housing Finance Agency (FHFA) House Price Index (seasonally adjusted purchase-only, HPI) jumped 1.2%, the strongest gain in 22 months. Growth accelerated in all nine divisions in June, with all now at all-time highs, up from three in January. Nonresidential construction activity will remain the biggest growth area in 2024, although we see this activity beginning to reverse as soon as 2025 as projects linked to the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and the CHIPS and Science Act wind down. For the West Coast, residential construction continues to underperform. Total construction spending in the region will average 1.0% growth per year between 2024 and 2026. Nonresidential and infrastructure continue to be bright spots, growing 12.1% and 19.5%, respectively, in 2024. Taiwan Semiconductor Manufacturing Co. Ltd.’s (TSMC) investment of $40 billion in semiconductor factories through 2026 will support local demand for workers in the industrial construction sector.