The month of September, according to the U.S. Census Bureau, and the U.S. Department of Housing and Urban Development, showed an increase in the number of residential new-home sales. Hopefully, this points to a new upward trend in the housing market, as predicted by the recently completed 2011 McGraw-Hill Construction forecast.
Despite the fact that the number of homes sold is still depressed by 30% over September of 2009, the market is showing a 6.6% increase over August of this year. What concerns the National Association of Home Builders (NAHB), though, is that builders appear to be selling off their inventory without investing in new construction. Demand for new homes may be increasing, but builders’ inability to secure funds for new construction is limiting the number of units they’re making available. This could have a moderating effect on the market, as fewer available homes may drive up the cost, lowering demand, and stalling the forward momentum the housing market has seen in the last quarter.
The remodeling industry, though, is still reporting declines, though it’s in line with what they’ve been seeing for the past few months. Homeowners are still largely unwilling to finance large remodeling projects due to the uncertainty of the country’s economic state.
Despite the fact that the number of homes sold is still depressed by 30% over September of 2009, the market is showing a 6.6% increase over August of this year. What concerns the National Association of Home Builders (NAHB), though, is that builders appear to be selling off their inventory without investing in new construction. Demand for new homes may be increasing, but builders’ inability to secure funds for new construction is limiting the number of units they’re making available. This could have a moderating effect on the market, as fewer available homes may drive up the cost, lowering demand, and stalling the forward momentum the housing market has seen in the last quarter.
The remodeling industry, though, is still reporting declines, though it’s in line with what they’ve been seeing for the past few months. Homeowners are still largely unwilling to finance large remodeling projects due to the uncertainty of the country’s economic state.
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Mike Wrightly is mostly diesel fumes and duct tape; he grew up around heavy equipment, and holds a Bachelor's degree in Mechanical Engineering.
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