Residential construction down 4.2% for the month of March; down 34% from last year
Dennis Norman
By: Dennis Norman
Today the U.S. Census Bureau released it’s construction spending report for March, 2009 showing that spending on private, residential construction was at a seasonally-adjusted annual rate of $258.4 billion. This is down 4.2% from February and down 34% from a year ago.
In light of what is going on in the housing market and the sluggish sales rate of new homes, this is not surprising news. And, as I have said before, while this is bad news for all the thousands of people that are out of work as a result of the lack of construction spending, this is what we need to help get the market back on track. We still have a surplus of homes for sale out there and sitting vacant so we don’t need to increase the inventory at this point.
For home buyers I think this shows that the industry is reacting smartly and letting inventories decrease. This means that while most builders are free upgrades, discounted prices and other incentives to move out inventory, this is not going to last forever. We will reach the point where the inventory is back to a manageable level and many of the incentives will go away.
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