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June 19, 2011

What Happened To Residential Construction In Our Country?

Hi Folks,

   Welcome back !

   As you may be aware, late last week the May 2011 figures for New Residential Construction were released, and we'd like to take a look at these figures today, which are broken down into 3 components; Building Permits, Housing Starts, and Housing Completions.

   Building Permits for privately-owned housing units were up 8.7% from April, and 5.2% above May 2010, while Single-family authorizations were 2.5% above April. Housing Starts for privately-owned housing was up 3.5% from April, but down 3.4% from May 2010, with single-family housing starts 3.7% above April. The last piece of the equation was Housing Completions, with Privately-owned Up 0.4% from April, but down 22.5% from May 2010.

   "Perhaps my type of perspective on these numbers is interesting", says Bo Hammond, VP of Sales for the Coastal Lumber Company, which supplies raw material for housing attributes, mouldings, flooring, and cabinetry, and advises that his perspective is from a "practical sense".

   Hammond says that we are, "overbuilt from a residential construction standpoint, and the allure of home ownership has faded for those wage earners who historically would have been buying their first house and starting families." He continues to say that the affect on jobs of the recent recession has, "fundamentally changed the perspective of the emerging generation that are getting out of school and deciding to live at home, rent, get married, etc."

   Hammond says that uncertainty in jobs, home values, and financial security has essentially "tabled a normal progression that would encourage behavior that would have building permits and residential construction increasing.", but says, "In lieu of this, remodeling and multi-family construction have been the larger positive influences, but those combined are volatile and don't have the ability to impact GDP like healthy residential construction had 5-7 years ago."

   "I would just reinforce that the market for new homes is extremely competitive right now. This is a great time to buy due to the affordability of homes and interest rates.", says Michael F. Dillon, Jr., Executive Director of the Builders Association of Northern Nevada, who also reminds us that, "Homeowners will still receive a great tax incentive to buy a home and build equity."

   What do you think of the recent numbers? What would you attribute the huge dip on Building completions from just one year ago? We'd love to hear your take on things.

Have a Great Week, and Happy Rent-to-Owning !
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #residentialconstruction #remodeling #taxincentive

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