Home construction started to slow down last August with 3% decline in the number of apartment complexes and houses being built to supply the increasing demand.
According to usatoday.com, slowing down of house construction started last month in the Northeast and Midwest while South's home construction climbed a bit. However, the overall percentage of home construction went down with 3%.
Home builders and home construction companies are still hopeful and optimistic despite of the decline. Tom Wind, executive vice president of home lending at EverBank, said "This is a mere blip on the radar. The housing market's underlying fundamentals remain on pace for continued recovery."
Also, housing constructions have risen by 11.3% this year while higher job opportunities of 2.9 million jobs for the past year had made housing demand higher than before by renters and buyers. Developers are also optimistic that demand for new houses will keep the housing construction industry alive and well as approved permits rose to 3.5% last August resulting to a rate of $1.17 million per year.
In a report by wsj.com [Wall Street Journal], the 3% decline in home construction is not a sign of weakness in the industry. J.P. Morgan Chase economist Daniel Silver said "The multifamily data have been very noisy lately mainly because of a massive swing in the data for the Northeast related to a changing tax incentive. The data available for the third quarter to date are significantly below the second-quarter averages because of effects of the tax change, but we think the underlying trends in the multifamily data remain solid."
Also, single- family home permits broke a record of high percentage since January 2008 with 699,000 permits. Ian Shepherdson, chief economist at Pantheon Macroeconomics, said "Single-family permits-the most important, and most stable-number in the whole report, have now recovered from their winter drop and are now trending higher."
What do you think about this decline in home construction industry? Is it really a start of something great as what the experts say? Share it in the comments!