New Home Construction
January 19, 2011 by USA Post
Housing starts fell 4.3% to a seasonally adjusted annual rate of 529,000 from a revised down 553,000 a month earlier, the Commerce Department said Wednesday. However, building permits, a gauge of future construction, jumped 16.7% to an annual rate of 635,000.
Economists surveyed by Dow Jones Newswires expected overall housing starts to decline slightly in December to a rate of 554,000 initial estimate of 555,000 government in November.
The results were driven by a fall of 9.0% in construction of single-family homes at a seasonally adjusted annual rate of 417,000. Housing five or more units, a volatile part of the market, rose 25.9% last month.
(AP) – Builders began work last year on the number of seconds fewest homes in more than half a century, that the weak economy kept people from buying homes.
Builders broke new ground on a total of 587,600 units in 2010, barely better than the 554,000 started in 2009. These are the two worst years on record dating back to 1959.
And the pace is increasing. The Commerce Department reported Wednesday that builders began work on a seasonally adjusted annual rate of 529,000 new homes and apartments last month. It is down 4.3 percent from November and the slowest pace since October 2009.
In a healthy economy, manufacturers are starting to approximately one million units per year. They built twice as many in 2005 at the height of the housing bubble. Since the market is declining.
Unemployment remains high. A record number of foreclosures have forced property prices down and the credit crunch has made mortgages difficult to obtain. Some potential buyers who could qualify for loans are reluctant to enter the market, fearing that prices will drop further.
People are buying fewer single-family homes, which represent nearly 80 percent of the market. Demand fell by 9 percent to an annual rate of 417,000 units. Building has increased by 17.9 percent to an annual rate of 112,000 units.
The stagnation in the housing burden on the global economic recovery. Each new home built creates, on average, the equivalent of three jobs for a year and generates about 90,000 and taxes, according to the National Association of Home Builders.
A positive sign is that the manufacturers seem to be planning more projects in 2011. Building permits, considered a good barometer of future activity, rose 16.7 percent in December to a seasonally adjusted annual rate of 635,000, the best pace since March.
But manufacturers fired more likely license in California, New York and Pennsylvania before code changes in 2011 – a factor that undoubtedly influenced the tip.
“Some manufacturers took place in December with plans to fight the change,” said Jennifer Lee,anlyst at BMO Capital Markets. Lee stresses that the biggest gains were in the Northeast, which rose 80.6 percent, and the West, up 43.9 per cent.
Housing construction fell in all regions of the country in December except the West where the activity jumped 45.8 percent. Construction fell by 38.4 percent in the Midwest and was down 24.7 percent in the Northeast and 2.2 percent in the South. Severe winter weather may affect the activity in the Northeast and Midwest.
Copyright © 2011 The Associated Press. All rights reserved.
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