Housing market takes a dip in January; forecast for 2013 remain strong
Construction of homes in the U.S. took a slight dip in January, however, still remains high relative to 2008. The Commerce Department says that construction declined from the 8.5% peak seen this past December to 7.8%. However, housing experts attribute this type of dip is seasonal and that January has always been a slow month in the housing market.
Conversely, applications for building permits increased to 925,000 annually in the month of January, 1.8% higher than December.
The construction of single-family homes increased by 0.8% in January. Low interest rates and pent up demand have been a catalyst for growth in the U.S. housing market which has been recovering from a period decline and stagnant growth.
The demand for new homes is apparent. Supply of previously occupied homes on the market is at a decade low, particularly in Massachusetts. In addition, the rate of foreclosures has decreased nationally meaning there are less low-cost homes being dumped into the housing market.
Macroeconomic trends have encouraged the construction of homes and apartments nationwide. In fact, construction levels in 2012 were at the highest they have been since before the housing bubble burst. Construction began on 780,000 homes last year, which is still unhealthy relative to the size of the population.
New homes are an excellent predictor of economic growth. On average, each home built creates three jobs for a year and generates about $90,000 in tax revenue according to the Boston Herald.
Relative to the past 4 years, things are going very well for the housing industry. However, many economist predict that a full recovery will not be realized until at least 2015.