The headline on CNNMoney.com reads New home construction surges 41% but unless you read all the way to the end, you think that housing is taking off again. The sudden surge in March has been accredited to the federal housing tax credit.
“The increase in demand prompted by the tax credit has lifted construction,” wrote Ian Shepherdson, economist at High Frequency Economics, in a research note.
“But the expiration of the credit … has made homebuilders wary about continuing to add new homes during the summer,” he said.
Building Permits Rise and Fall
Building permits surged to an adjusted 672,000 in March while economists were forecasting only 655,000. Read a bit further and you find that April permits dropped to 606,000 when economists predicted 680,000.
The CNNMoney.com headline paints a pretty picture but when you read on, it’s more of the same. The housing market will continue to stay slow until America goes back to work. On that note, I am hearing good buzz around Raleigh that IT job openings have increased! I understand the outlook for manufacturing jobs has increased as well. There will be forward steps and backward steps but the result needs to be positive forward motion.
In a tweet from Dawn Wotapka (A residential real estate writer for Dow Jones Newswires and The Wall Street Journal) from 5/13:
That’s a wrap for #homebuilders, bloody Thursday. Decliners above 6%: MHO, KBH, HOV, SPF. NVR does BEST with 2.7% loss. Index -4%.
Not out of the woods just yet, but it’s slowly getting better!