US Housing Sector Slumps to 10-Year Low
Reports from the US suggest the housing sector over there has descended to a 10-year low, citing January 1997 as the last time that construction was taking place so slowly. In a general downbeat atmosphere, the situation was exacerbated by the Commerce Department, which on the 16th August 2007 published data relating to the previous month. July, the department said, saw a slump of 6.1 per cent in the construction of new houses and apartments - a 21 per cent drop over the equivalent figure from the same month in 2006.
On a national basis, the department highlighted how new-builds lost 11 per cent in the South of America, 1.3 per cent in the Northeast, and 3.7 per cent in the West. The Mid West fared better - actually showing an increase of 2.6 per cent.
From an investing perspective, the diminished housing market could offer some appeal, but one area to avoid is Miami, which, according to Forbes, tops a national survey assessing the risk factors of its real estate markets. Trailing behind are Orlando, Sacremento and San Francisco.
The Housing market in the US has been struggling now for over a year. The tough pressures being faced by the construction industry include excess stock of homes, left unsold, married with less people actually buying property. With no immediate let-up in site, potential buyers are delaying their decisions for now, while stricter lending procedures have diminished the numbers of people acquiring new homes.
According to the Home Builders Group's President, Brian Catalde: "Builders realize (sic) that issues related to mortgage credit cost and availability have become more acute, filtering some prospective buyers out of the market and prompting others to delay their decision to purchase a home".
On the positive front, at least one source within Construction sees an end in sight, and a subsequent recovery. The glimmer of hope emanated from the National Association of Realtors, the largest organisation of estate agents in the US. Although, in response to today's news, it lowered its predictions for sales within the housing market for the remainder of 2007, it added that sales should gain some next year.
Source - Construction International's US Reporter
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