Glass Half Full or Half Empty for New Home Construction
It depends on who is writing about it how you might view the December performance for new home construction and the outlook going forward. Two articles this week, one at the MSNBC site and the other over at CNNMoney used the same government reports but interpreted them differently for how new home construction is doing these days.
MSNBC
The article title is “Housing starts fell in December, capping a grim year.” Builders started just 606,900 homes last year, only slightly better than the previous two years. That’s roughly half of the 1.2 million starts that most economists consider a healthy market.
Last year marked the worst for single family home construction on records going back 50 years. Single family home construction is critical to a housing rebound, as a large part of the economy is involved, both in labor and materials.
Fewer people are interested in buying these days due to the continued pressure of foreclosures on prices, as well as tighter credit and down payment requirements. Fully a third of the population can’t qualify for a mortgage and make the down payment according to some analysts. First time home buyers aren’t out there much either, instead stating that they plan to rent for a significant time period.
Existing homes have fallen in price to a point where they represent a better deal than new homes, further depressing home builder expectations. One study states that the median price for a new home is now roughly 30% higher than for a comparable existing home.
CNN
The results of the numbers announced lagged industry expectations significantly. However, the results were considerably better than a year earlier, with permits up by 7.8 percent and starts spiking 24.9%. David Crowe, chief economist for the National Association of Home Builders said “I think it’s a decent report. Single family starts were up 4.4% and permits up 1.8% from the previous month.”
He also stated that “We expect a better 2012, based on an economy that will continue to improve.”
Oh well, it’s hard to decide if this glass is half full or half empty.
It depends on who is writing about it how you might view the December performance for new home construction and the outlook going forward. Two articles this week, one at the MSNBC site and the other over at CNNMoney used the same government reports but interpreted them differently for how new home construction is doing these days.
MSNBC
The article title is “Housing starts fell in December, capping a grim year.” Builders started just 606,900 homes last year, only slightly better than the previous two years. That’s roughly half of the 1.2 million starts that most economists consider a healthy market.
Last year marked the worst for single family home construction on records going back 50 years. Single family home construction is critical to a housing rebound, as a large part of the economy is involved, both in labor and materials.
Fewer people are interested in buying these days due to the continued pressure of foreclosures on prices, as well as tighter credit and down payment requirements. Fully a third of the population can’t qualify for a mortgage and make the down payment according to some analysts. First time home buyers aren’t out there much either, instead stating that they plan to rent for a significant time period.
Existing homes have fallen in price to a point where they represent a better deal than new homes, further depressing home builder expectations. One study states that the median price for a new home is now roughly 30% higher than for a comparable existing home.
CNN
The results of the numbers announced lagged industry expectations significantly. However, the results were considerably better than a year earlier, with permits up by 7.8 percent and starts spiking 24.9%. David Crowe, chief economist for the National Association of Home Builders said “I think it’s a decent report. Single family starts were up 4.4% and permits up 1.8% from the previous month.”
He also stated that “We expect a better 2012, based on an economy that will continue to improve.”
Oh well, it’s hard to decide if this glass is half full or half empty.