Housing starts expected to rebound slowly
As reported by the Austin Business Journal …
Housing starts may rebound slowly, although they have begun to increase lately, according to a forecast from housing market research firm Metrostudy.
“We believe that some of the recent gains in housing starts could be given back during the third and fourth quarters of this year if the current tax credits are not extended,” said Brad Hunter, Metrostudy’s chief economist and national director of consulting. “That said, the forecast for 2010 is for steady increases in starts.”
The U.S. Department of Commerce is set to release national housing starts figures tomorrow.
Hunter said starts have increased in recent months partly because of the $8,000 tax credit for home buyers, but also because speculative inventories are down sharply among many builders.
He said home builders need to start a home every time they sell one to keep speculative inventory “at a normal level,” but that starts are nevertheless likely to rebound only slowly from this point for several reasons:
• Some builders in the bubble markets still are working off inventory.
• Some builders’ banks are cutting their credit even if they are current on their loans.
• Some builders are finding prices too low to sell homes profitably.
Nationwide, Metrostudy forecasts 562,000 housing starts for 2009, a 38 percent drop compared with the same period in 2008.
Single-family starts are forecast at 438,000, a 30 percent drop from 622,000 in 2008.
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