Posted on 09/19/2007 8:15:50 AM PDT by stainlessbanner
Housing Construction Falls to the Slowest Pace in 12 Years
WASHINGTON (AP) -- Construction of new homes fell in August to the slowest pace in 12 years as troubles in the housing industry continued to intensify.
The Commerce Department reported Wednesday that construction of new homes fell by 2.6 percent in August to a seasonally adjusted annual rate of 1.331 million units.
The housing industry is experiencing its steepest downturn in 16 years with analysts forecasting weak prices and further declines in sales for months to come, given rising mortgage defaults which are dumping even more homes on an already glutted market.
On Tuesday, the National Association of Home Builders reported that its index of builder confidence fell in September to 20, tying the lowest level on record.
Will this cause the price of lumber and nails to go down?
Its like the dollar, when its high all the news is how no one is buying American goods and business is suffering and then when its low all the news is how bad it is for importers etc etc etc.
“Housing Construction Falls to the Slowest Pace in 12 Years “
You’d think one major headline should be:
“Business Cycle Not Yet Repealed”
The laws of economics still apply...
*sob* *snif*
Yay! Fewer McMansions going up near my home! More woods and less developments!
Kick out the illegals and we won’t NEED new homes to be built for several years.
Oh yea. That means they won’t be building the illegal housing development behind my house. I have a gorgeous view — have had for many years. Bought the house because the land owner’s grandmother had it in her will that as long as her farm house was there, no building...and that the farmhouse was to STAY on the land and not be build around for so and so many acres.
Well it stayed on the land...but the owner picked it up and moved it a few acres from its original location so he could build without violating the will. Once he got around that, he waited a year ‘til his conscience seared over, and then he just tore the lovely old house down(will or no will). They have put in a road...now perhaps because of this, they will NOT build.
Sorry...diverted from purpose of thread.
As you were.
Because simply put housing and industries related to it are the underpinnings of the entire economy, no other industry comes remotely close to the size economically or employment wise to that of Housing and its supporting industries.
Piling up of unsold houses is not a good indicator of economic health.. its an indicator of economic stagnation... and devaluation in the housing market devalues all other assets as well.
Lets say for instance, you bought your house for 350k.. and today its worth 200k... you put down 40k when you bought and your mortgage payment is ~ 2500 a month. Now you are looking at you being underwated and paying ~2500 a month and your out your actual 40k of cash... what incentive do you have to continue making that payment????
TRILLIONS of dollars is on its way to evaporating and people are in denial over the scope and impact overall this is going to have.
Housing is the fundamental basis of our entire economy, how goes housing in general, so goes the rest of the economy. You don’t have a booming economy with a declining housing market.
Yes in the grand scheme, housing prices will eventually stablize.. but only after alot of fallout across the entire economy.
“The housing industry is experiencing its steepest downturn in 16 years”
Yes true, after having gone through one of the longest near-continuous climbs in history. Market cycles are market cycles; they can either be long, or short, extreme or mild, but any great or long “up” cycle will, inevitably be followed by a “down” cycle, and vice-a-versa.
So, what is the real “news” here. The housing market is working; it’s paring down an excess that had built up over a long period of growth.
When will people realize just how uneducated and stupid that “journalists” are?
I sure hope so - we're getting ready to do a total remodel with two additions.
Prices were slashed up to 100k on certain homes, mostly by offering upgrades which carry about a 50% profit margin anyway but nonetheless do entice buyers. Between this and the huge rate cut by the Fed, the sheeple will dash out and buy a house, or try to anyway, if the banks will give them the money.
>>housing and industries related to it are the underpinnings of the entire economy, no other industry
>>comes remotely close to the size economically or employment wise to that of Housing and its supporting industries.
This is true only because of the massive government intervention in the economy to support housing production and prices. Would housing be as large a portion of the economy were it not for this intervention? Almost certainly not. This is a symptom of a distorted, unhealthy economy. It will correct whether the government wants it to or not.
Prices were slashed up to 100k on certain homes, mostly by offering upgrades which carry about a 50% profit margin anyway but nonetheless do entice buyers. Between this and the huge rate cut by the Fed, the sheeple will dash out and buy a house, or try to anyway, if the banks will give them the money.
Well tell them to hurry up.
DJIA 13835.55 +96.16 (0.70%)
NASDAQ 2673.15 +21.49 (0.81%)
NYSE 10000.14 +91.11 (0.92%)
S&P 500 1532.78 +13.00 (0.86%)
Let's see:
1. Keeping a better credit score than if you default, allowing you to buy more things, like cars and plasma TVs, that will depreciate at least as much in their 1st year
2. Keeping a nice roof over your head because if you give it enough time, the price will rebound
3. No one should buy a house thinking it is an ATM - it is better positioned to keep the cold out and the rain off
“Will this cause the price of lumber and nails to go down?”
The price of lumber is at its low of the last year right now. Lumber is overproduced in North America. Production is down , but demand is down even more.
As far as nails. It has more to do with the price of steel which is close to its highs.
The Lumber Broker
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.