With housing construction hitting a record low in April, economist are wondering if the positive reports from the Home Builders Association prove that we are at the bottom of the cycle for new construction. The latest report shows that single family construction rose a slim 2.8 percent to an annual rate of 368,000. While this is positive for single family construction, apartment construction fell 12.8% for the same period. Economist had hoped to see a positive increase for the month for both sectors but this data shows that the housing market is still struggling with the worst collapse in the housing market since post World War II.
While the housing starts are still down, there are positive signs that the market is correcting itself. Builders are reporting that there inventory of homes is dropping and the new incentives for first time home buyers is helping to drive sales of new homes.
We are far from out of the woods as some experts feel the peak of the Foreclosure market won’t hit until the first quarter of 2010. The huge inventory of resell homes and foreclosures are putting huge pressure on New Home builders who must lower prices and offer incentives in order to sell homes.