While the economy seems to be slowly recovering, the lack of new homes being built isn’t contributing to that recovery at all. The building of new homes in Texas will help create jobs and keep the economy growing when we finally get past this recession.
The low number of new homes being built recently is most likely linked with last months uncertainty on whether or not the first time home buyers for credit would be extended or not. This shows just how much influences the government’s decisions can affect the nations housing markets and the construction of new homes.
The government passed the tax credit extension with a house vote of 403-12 early this month. They also expanded the tax credit to apply to existing homeowners and not just first time buyers. Even with the tax credit the housing market is currently weal and is slowing down our progress as far as getting through this recession.
As proof of this, the building of new homes during October fell to lows not seen since April of this year. These numbers show that home builders aren’t confident that there are enough buyers on the market to buy up the excessive amount of homes that are currently out there. The record high number of foreclosures does nothing to help the situation.
The slow recovery is keeping inflation down. Prices on consumer products did increase faster than predicted during the month of October, but they are still considerably lower than they were last year. According to figures released by the Labor Department, consumer prices increased 0.3% in October. Figures for the building of homes and apartments show the opposite. The building of new homes and apartments during the month of October fell 10.6% when compared to a month earlier. The Department of Commerce shows that the seasonally adjusted annual rate of new homes and apartments being built fell from 592,000 in September 2009 to 529,000 for the month of October 2009.
The fact that demand for new homes is so down should throw up red flags. This could show that 2010 could be rough on the housing market, which will only slow our economic recovery.
