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Housing Recovery Remains Elusive in 2011

An increase in residential construction spending in March has also brought mixed news -- with the improvement limited to home improvement spending, with single-family and multifamily construction spending down, in line with weak housing starts. Courtesy of Prudential Laney Real Estate

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As the nation's housing industry slowly moves to higher ground, weak consumer confidence in the face of persistently high unemployment and a wobbly U.S. economy will restrain housing demand and production this year, according to National Association of Home Builders semi-annual Construction Forecasting Webinar.

But housing market conditions are improving, said NAHB Chief Economist David Crowe, with housing affordability at its best in a generation. Household formation rates began to thaw from the deep freeze induced by the recession. Overall, Crowe expected little improvement in single-family housing starts in 2011, but solid gains in multifamily starts.

Moody's Analytics Chief Economist Mark Zandi expected further modest declines in house prices over the next 12 to 18 months as a result of the ongoing foreclosure crisis. However, NAHB Senior Economist Robert Denk indicated that foreclosures and house price declines are limited to a small number of troubled states - including Arizona, California, Florida and Nevada.

Key economic data show the employment situation improving, with an increase of 244,000 new jobs in April and an average of 233,000 jobs added per month since February. Even so, 22 months into the recovery unemployment is at a lofty 9 percent and 13.7 million Americans are officially out of work.

- Courtesy of NAHB

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December 14, 2019, 8:04 am PDT

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