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Archive for the ‘Housing Starts’ Category

After reaching a three-decade low of 55.3 in November, the Reuters/University of Michigan preliminary index of consumer sentiment rose to 58.5 from 57.3 in March, based on an average of sixty one estimates, and it is hoped than an improvement in confidence may help sustain a recovery in consumer spending, which accounts for 70% of the U.S. economy.

The Commerce Department said yesterday (April 16th) that builders broke ground at an annual rate of 358,000 on single-family homes in March, which although unchanged from the previous month, suggests that the housing market may have reached bottom, and The National Association of Home Builders/Wells Fargo confidence index also rose this month to its highest level since October.

James O’Sullivan, who is a senior economist at UBS Securities LLC in Stamford, Connecticut said, “The economy has started to show signs of improvement. Given all the policy action and mortgage rates coming down, we are starting to see less pessimism”.

Federal Reserve Chairman Ben S. Bernanke said just one day before the report was made public that, “the signs of stability make for a potential first step toward a recovery from the downturn that started in December 2007″.

Other encouraging news is that reports by the Philadelphia Fed and New York Fed earlier this week showed manufacturing shrinking at a slower pace this month, and according to the Labor Department, the number of Americans applying for first-time jobless benefits unexpectedly dropped last week to the lowest level in almost three months.

A Commerce Department report released yesterday states that house prices in the U.S. fell by the most in over eighteen years with November prices declining by 8.7 percent from a year earlier.

Moreover, housing starts fell 16 % last month to an annual rate of 550,000 which is the lowest since the government started compiling statistics in 1959.

A major cause is reckoned to be the record number of foreclosures and the highest jobless claims in over twenty six years.

The U.S. lost more than 2.6 million jobs in 2008, the most since 1945, and U.S. stocks had their worst performance since the ‘Great Depression’ and the number of U.S. houses in foreclosure last year rose to an all time high of 2.3 million.

The West Coast which includes California showed the sharpest declines in the house price index and the value of homes there fell by 22 %.

Furthermore, there’s no sign that the housing market has hit rock bottom and many observer believe that data will continue to show a worsening trend until at least 2010.

Shares in construction companies fell 76% over the last three years and builders are slashing their margins to compete with the prices of foreclosed properties which always sell at steeply discount prices and this fact offers perhaps one of only upsides to all the gloom and despair.

There are now some incredible deals available to those that can qualify and banks need to loan money to stay in business so provided you believe that you’ll keep your job this might be a great time to consider purchasing a property.