Worcester — Homebuilders' confidence in a near-term housing recovery sank to a new all-time low this month, reflecting growing worries over the U.S. financial crisis, rising unemployment and weakening consumer confidence, an industry trade association said Tuesday.
Construction starts on housing fell 4.5 percent in October, less than economists forecast, to an annual rate of 791,000 that was the lowest since records began in 1959, the Commerce Department said in Washington. Building permits, a sign of future residential projects, dropped 12 percent to a 708,000 pace, the lowest since at least 1960.
Compared with October 2007, work began on 38 percent fewer homes.
The National Association of Home Builders/Wells Fargo index of builder confidence dropped lower than forecast in October to 9, its lowest since record-keeping began in 1985, the Washington-based association said yesterday. The gauge averaged 27 last year.
``We are in a crisis situation,'' NAHB chairman Sandy Dunn, a builder from Point Pleasant, West Virginia, said in a statement. ``Tremendous economic uncertainties have driven consumers from the housing market, and it's going to take some major incentives to bring them back.''
In recent weeks, homebuilders have ratcheted up pressure on Congress to take steps that go beyond trying to reduce foreclosures. the industry wants lawmakers to enact new incentives aimed at getting reluctant homebuyers back into the market.
Specifically, they're asking for a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year and a temporary interest-rate reduction on 30-year mortgages.
The builders' proposed housing aid measures would cost the government an estimated $270 billion, and would amount to a short-term fix at best, Deutsche Bank North America analyst Nishu Sood concluded in a research note earlier this month.
Builders have grown increasingly convinced that only government intervention will help stem the downward spiral in home prices and rising foreclosures that have led to a dearth in demand for new and preowned homes.
Stay tuned to The Achieva Factor for developments.
Adam Pasquale
Tuesday, December 9, 2008
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2 comments:
As a contractor who still does my fair share of carpentry, and who has been pricing myself a shop, I prefer metal. I can get a Metal Building erected (material & labor) for the same price that I would pay for the wood shop, with siding, roofing, etc. I wanted to build it myself but cannot justify the obvious choice. By the way, I price out jobs every week.
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