Decline by 4% in December for house construction; but permits for buildings on the rise
Statistics in the US housing sector indicate recovery from the worst crisis. New house starts showed a decline of 4% (seasonally adjusted for the months) in December – 557,000 compared to 580,000 in November.
For the whole of 2009 the number of homes started was an estimated 554,000 which is 39% down from 2008 showing 906,000 – the lowest figure since 1945. Single family homes started were 444,000 in 2009 – a drop of 29% – lowest since 1959.
Starts of house construction for single family homes, apartments and condominiums were lying low in 2009 showing only a 0.2% up compared to December 2008.
Economists are of the view that the depressed levels of new construction will push up the sales of unsold new homes stagnating in the real estate market. The estimated rate of selling at 557,000 homes was better than the expected rate of 540,000 in December.
The house building industry is cautious to slow down production of new homes with a view to cut down inventory of unsold homes. Statistically there is a 60% fall in the number of brand new homes available in the market – just 235,000 – making it the lowest figure since 1971. The number of completed homes is also low at 796,000 – a record fall of 29%.
While the builders face stiff competition from foreclosures, the buyers are cautious watching the situation.
However there is reason for some optimism in the future. December 2009 show encouraging figures of housing market statistics. There is an increase of 10.9% in the building permits obtained. The annual rate stood 653,000 – highest in the last 14 months. Single family home permits were 508,000 in December – a rise of 8.3% and the highest in 15 months.
It is pertinent to point out that start of housing depends upon seasonal factors. The weather conditions play an important role. This December has been the coldest and wettest on US history.
For arriving at the actual figure of housing starts, it requires nearly 4 months. Even then there are fluctuations in the collection and recording of data. However all put together, the indications are there is a light at the end of dark tunnel of housing market in the US.
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