Shea Home in Arizona
Construction of new single family homes rose in the month of July to levels not seen in Phoenix since October of 2008. Add to that the fact that building construction permits rose almost 6 percent during the month of July and we could be seeing the turnaround we have been looking for in the valley’s construction industry.
Information obtained by the National Association of Home Builders states that the equivalent of three jobs lasting one year are created for every new home that is built in the valley and around $90,000 is paid in total taxes to the local and federal government for each new house built.
Having construction pick back up in the valley is crucial to the economy of Arizona. The construction of new homes is up around 37% from last winter. It is anticipated that this rise in the construction of new homes will help the economy for the first time in over 3 years.
We shouldn’t expect to notice a huge difference quickly. After all, this is the worst recession the housing industry has been through since the Great Depression. To give you an example of how bad things got, we are down 70% from the housing industry’s peak a few short years ago. Statistics show that in most markets, we are slowly recovering, but new home construction isn’t the only aspect that needs to keep improving for us to fully recover. For instance, the production of new apartment buildings fell over 10 percent in the last couple months, and we’re still looking at a large number of mortgage delinquencies and pending delinquencies.
We must keep in mind that the unemployment rate is currently at 9.7% (nationwide) and it is predicted to increase. This will leave more homeowners strapped for cash and unable to stay current on their mortgage, let alone buy a new home.
Overall, at the very least, we can take solace in the fact that the market for new homes is no longer getting worse, which that could be a good sign that we are entering a period of economic recovery.
