In mid-August 2010, the U.S. government reported construction of new homes had accelerated. Nevertheless, the new home construction outlook remains poor. Housing starts were up 1.7% over June, according to the Commerce Department. This corresponds to a seasonally adjusted rate of 546,000 units, up from 537,000 in June. New single-family home starts rose by 4.2 percent, and new apartment starts rose 32.6 percent.
However, these figures indicate a 7 percent drop from July 2009. Building-permit applications during the summer of 2010 also slackened, with a 3.7 percent drop compared to last year, indicating the construction industry has not recovered. The housing market has struggled after the $8,000 first-time homebuyer tax credit expired earlier this year.
The National Association of Home Builders released a report in August 2010 suggesting homebuilders’ confidence is still low. The association’s index that measures builder confidence was lower than expected with a reading of 13. A reading must be above 50 to indicate homebuilders a positive impression.
The Mortgage Bankers Association reports mortgage applications for new and existing homes are lower than expected, despite historically low home loan rates of around 4.5 percent.
The National Association of Realtors reported in August that median-sale prices of homes in major metropolitan areas are up a fraction, to $176,900, over prices a year ago of $174,200. Nevertheless, most experts think home prices will fall substantially before rebounding.
In general, consumers continue to lack confidence in the U.S. economy. Many believe America is still suffering through a recession. Fears about losing their jobs, paying for their homes, and mounting healthcare costs worry many Americans. Finding affordable medical care and medical supplies, such as a finger pulse oximeter, is important.
U.S. economist at Capital Economics Paul Ashworh commented that the housing market is likely to remain lethargic for several more years. He said that the housing industry was not likely to help the depressed U.S. economy recover.
