GlassBuild Economist: Slowdown Ahead for Residential Construction

Last week during GlassBuild America: The Glass, Window & Door Expo, Connor Lokar, senior forecaster, ITR Economics, delivered the annual economic forecast at the GlassBuild Main Stage.  

Lokar noted that residential construction is experiencing a slowdown. “Housing was overstimulated. People had abnormally high savings and low mortgage rates. Now, home prices are falling,” Lokar said. “Housing is in recession. … We will likely see a double-digit rate of contraction before it’s all said and done.”

However, Lokar said the downturn will not be a repeat of the Great Recession housing crash. “This is not going to be 2012. But it is going to be a buyers’ opportunity,” he said.

In the United States, the slowdown in growth will likely help to ease the primary challenges companies have been facing in 2022. “Labor, inflation, supply chains, all of those will be better by next year,” Lokar said.

The high demand of 2021 and 2022 has made it difficult for suppliers “to make any headway” in addressing supply. However, now they are “adding capacity, adding people. … Companies can’t use COVID to make excuses anymore. Things are going to stabilize and get better.”

Inflation rates will also get better in the coming year. ITR forecasts project falling inflation rates through 2023 to a rate of about 3 percent by 2024.