Current Real Estate News

Here are a couple of stories in the news this week of interest to real estate investors.

Construction Spending Increases

After a big decline in July, builders of homes, office buildings and other projects increased their spending in August by 1.4%. This was right after a 1.4% drop in July. Unfortunately, it’s not necessarily good housing news, as much of the spending increase was for government projects and schools. It was not a sign of private demand.

Building activity reached a seasonally adjusted annual rate of $799.1 billion, 4.8% above an 11 year low reached in March of this year. However, that’s barely more than half of the $1.5 trillion dollar pace that’s considered healthy. Many analysts agree that it could be four years before healthy construction levels are reached again.

Home Ownership Sees Biggest Drop Since Depression

The percentage of Americans who own their homes has seen the biggest decline since the Great Depression. Down to around 65.1% on average, here are some area numbers:

- West at 60.5%
- Midwest at 69.2%
- South at 66.7%
- Northeast at 62.2%

Among the states, New York is at the bottom, with home ownership at 53.3%, but the District of Columbia was even lower at 42%. At the other end of the spectrum are West Virginia at 73.4%, Minnesota at 73%, and Michigan, Delaware and Iowa all at 72.1%.
You’re not reading about massive defection from this country, so all of these people who no longer own are still here and renting. Low prices, dramatically low interest rates, and more renters are all still good indicators for rental property investment.