New Single Family Home Construction A Long Way from Recovery

By Kyle Chezum Updated on 1/18/2011

1/18/11

Everything is connected in real estate.  Mortgage rates influence sales, sales levels influence new construction projects, and so on.  It’s unclear what direction mortgage rates will move in the coming months, but construction, at least, doesn’t seem to be getting any healthier.  Bob Nielsen, Chairman of the National Association of Home Builders, made the following statement earlier this week.  "Unfortunately, a severe lack of construction financing, and widespread difficulties in obtaining accurate appraisal values, continue to limit builders' ability to prepare for anticipated improvements in buyer demand in 2011.”

Expected demand for new construction in the single family home market has dipped across the nation, with the greatest pessimism located in the Midwest and the West.  It’s unclear what economic indicators would signify a revival.

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