Home builders in the United States are coming out on the industry’s second worst years in decades, and the projection for this year for new home construction is only faintly better. Economists say it that the housing market could at least take three extra years before the housing industry can begin new home construction at a healthy pace.
For the time being, the housing market slump is pulling on the entire U.S economy, with approximately 1/4 of the jobs lost ever since the nationwide recession started in the construction sector.
Home builders usually help lead the country’s economy out of an economic recession because new home construction and other building projects stimulate growth, which leads to more job hiring.
But since the recession officially ended, one year and a-half ago, builders are still under pressure to compete in the new home construction market, which is swamped with unsold homes— foreclosed homes that have depressing prices.
U.S. economist at IHS Global Insight, Patrick Newport, new home construction and construction projects in the past generally drives the U.S economy back on its tack.
The report from the Commerce Department on Wednesday, homebuilders in 2010 recorded— about 587,600 new home construction, just vaguely better than the figures recorded in 2006 of 554,000 homes— which are the lowest yearly volume on record since 1959.
The major reason for the downturn is that most people are buying single-family homes— less, which represent almost 80% of the housing market.
Single-family new home construction declines 9 percent in December 2010 to a yearly rate of 417,000 units.