Construction of new homes continue falling nationally

It the direct aftermath of foreclosure crisis is hitting the housing markets, by flooding of foreclosure properties, the side-effect is bringing the construction industry to a grinding halt. When there are huge inventory of unsold homes, inevitably new home building had to take a back seat for want of buyers.

The downward economy saw to it that the demand for new homes dwindle, due to the resultant cash-crunch and consumers left with only meager amounts, to take care of their buying the day-to-day needs. From shopping malls to hotels and resorts, the financial strain is felt everywhere, whereby the revenues of all these outfits got thinning.

New home constructions are normally taken up as big projects, involving sizeable capital in millions of dollars. Lots were purchased with the intention of building more housing units economically, in full use of the available space.

Consequent to the continued fall in demands, many a housing projects were either put off indefinitely or abandoned totally, even before the starts. This is the situation obtaining today, invariably at various locations – high-end or low-end.

News is – according to the Commerce Department – new home construction activity plunged to the lowest level in June – the adduced reasons being weak economy and reduced housing demands. The seasonally adjusted annual rate – because it is usual that home buying activity will slow down in June and July every year – fell to 549,000 new constructions in June. This is a drop by 5 percent from the previous month, where it was revised downward to 578,000.

The decline in June is attributed to a drop of more than 20 percent in housing apartment and condo markets. However, the drop was comparatively lighter, just 0.7 percent in respect of construction of single-family homes.

Some more statistics relating to new home construction are : there is a brighter side to this sorry-state of affairs, namely increase in new home building permit applications by 2.1 percent, indicating future activity;  competition for new home building is stiff from foreclosure properties, which are available at considerable discount; sentiments expressed by home builders about future prospects, fell to the lowest ebb of 14 points since March 2009; every new home constructed means creation of 3 jobs per year and tax collection of $90,000 to local and federal governments.

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