USA property building levels remain stagnant

Friday, February 18, 2011

USA property building levels remain stagnant

The volume of USA properties built increased by 15 per cent last month, but remained at an historic low due to the weak market conditions caused by the sub-prime mortgage crisis, according to fresh figures released by the Commerce Department.

There were 596,000 housing starts in January, down 2.6 per cent compared to the number recorded during the corresponding month last year.

Inna Mufteeva, an economist with Natixis, told the press that it was a "quite disappointing report, despite the increase in the overall housing starts figure".

The report also shows that building permits fell by 10.4 per cent in January compared to the previous month, and 10.7 per cent below January 2010.

The reduction in the volume of USA properties built was necessary due to the fall in demand, caused by the USA property crash. Significant price cuts has ensured that a lot of the housing stock in the States is being absorbed, helping to improve market conditions.

Many experts project that the number of new USA homes will increase as the market recovery continues.

"[The market] should eventually be supported by the extremely low inventories of new homes and decent homes sales expected on the housing market," said Mufteeva.


A Place In The Sun