Housing Starts Take A Fall
The housing market has never been as low. According to the Central Bureau reports released by the government, the number of housing starts in January was 1.41 million, while that in December was 1.64 million. This is slowest pace in the last nine years.
Due to boom in the building sector in 2005, a large number of newly built homes were available for sale. This resulted in a rapid slump in the house sales during 2006 with the prices coming down. The current new home starts is around 22 percent lower than that in 2006 and 32 percent lower than the annual rate in 2005. According to a report released by National Association of Realtors the fourth quarter of 2006 recorded the biggest ever slump in home sales. KB Homes has reported a net loss of $49.6 million. Apart from KB homes, many real estate builders including Lennar, Pulte Homes, Centex and Toll Brothers have confirmed that there is a drop in the prices and home sales due to the availability of a large number of homes in the market.
But according to the NAHB / Wells Fargo Housing Market index, the month of February has been encouraging from the builders’ perspective. National Association of Home Builders has stated that there has been a rise in the index indicating an improvement in the near future.
Experts feel that this slump in the market may result in stabilization in the prices and sales. This period might help in reducing the number of available homes for sale.
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