New home construction, commonly referred to as housing starts, is a leading economic indicator. Because construction lags demand, increased home starts and permit requests indicate that buyer demand is strong.

For real estate agents, the biggest opportunity in new home construction is listings. By creating relationships with builders, you can position yourself to be first in line to get the listing. The first step to realizing this exciting opportunity is staying current with new housing construction statistics and understanding what the numbers mean. The second step is knowing where new construction projects are being built in your area and building relationships with those builders.

Identifying New Home Construction Projects

Every month, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) release national reports showing how many new home projects have been started and completed, and how many permits for new projects were filed.

The most recent housing report, on October 17, 2014, revealed that housing starts are up from last month and are also up year over year. September’s new home construction statistics show that privately-owned housing starts were at a seasonally adjusted annual rate of 1,017,000. This is 1.1 percent above last month. Housing starts are up 11 percent year over year.

Year to date, however, they are up only 3.8%. New home starts were sluggish at the beginning of the year because of inclement weather and reduced economic activity. Fortunately, as the months warmed up, so did the market.To exceed 2013 production levels by the end of December, the market needs to add 124,000 new home starts in Q4. We're averaging 84,500 new home starts nationally each month.

Generally, slow price gains coupled with increased inventory raises the question of whether the housing market is shifting to a down market. However, we have not seen the levels of new home construction that usually precede such a shift in the market. The market appears stable and likely to continue to improve.

To go beyond national numbers, real estate agents can find local statistics through city websites or your local chamber of commerce.

Building Relationships with Builders

New home construction presents great opportunities for agents. Not only does increased inventory offer more housing options at reasonable prices for first-time buyers, it also reduces upward pressure on prices, thus allowing move-up buyers the opportunity to move into larger, nicer homes. If you are in an area with high construction, now is a great time to create relationships with builders and schedule listing presentations for their communities. Get those listings! Although the greatest opportunity is on the listing side, by forming relationships with local builders and getting to know the properties inside and out, you can match your buyers with the perfect new home.

New home completions represent the number of homes ready for sale and move-in. To sell homes quickly, builders are getting creative at attracting potential buyers. In cities where new home starts are comparatively low, such as Phoenix, Ariz., Las Vegas, Nev., and Sacramento, Calif., some builders are offering to pay a portion of the closing costs. Others are offering complimentary upgrades such as swimming pools, which can cost upward of $20,000. Meet the builders in your area, build relationships, know the incentives and get the sale. It is a win-win opportunity for builders, you and your clients.

Read more about new home construction opportunities and working with builders:

Noah Ostruff: Working with Builders

Bill Hurme Shares 37 Years of Experience in the New Home Sales Niche