New Home Construction Down
May 21st, 08In another example of a weakening economy and a declining housing market construction of new homes are down. The Commerce Department stated that construction of new homes fell in February at a larger then expected rate reinforcing fears of a recession.
The Commerce Department is concerned with the economic growth of the nation and is often looked to for its findings concerning the job market and other financial markets.
As the rate of foreclosures reach a record high many experts do not find the new findings by the Commerce Department surprising. It is simply believed that with the stagnant job market and workers’ wages seeing cut after cut consumers do not have enough in savings for a new home. Along with this thought, many believe that consumers are finding it harder and harder to find a mortgage loan which would suit to their needs. Even though the Federal Reserve is slashing interest rates each month many lenders and banks are no longer willing to hand out loans to high risk clients.
This is helping to fuel the decline of construction of new homes. Many laborers are finding themselves jobless in the face of this which is rising unemployment rates and deflating consumer confidence.
Another factor discovered by the Commerce Department is that applications for construction of new home also lowered significantly and is currently at its slowest pace in over 15 years.
These findings demonstrate that the outlook is grim for the construction and housing industry.
January did see a slight rise in the demand for new housing but given the fact that it lowered so quickly in March is not bolstering confidence.
Financial experts are using the lack of demand for new housing as a method of determining recession while others remain optimistic. It is certain that consumers and the Stock Market will keep a close eye on additional findings concerning the new housing market in the coming months.
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