September 21, 2010
I’ve been hearing a lot about how the US housing market is taking a nosedive lately, but statistics released today indicate otherwise.
According to the Globe and Mail:
Construction of new homes and apartments rose 10.5 per cent in August from a month earlier to a seasonally adjusted annual rate of 598,000, the Commerce Department said Tuesday. That’s the highest level since April.
So despite the negative press regarding the US housing industry, it seems that developers aren’t scared off. But the US has yet to actually recover. First of all, the National Association of Home Builders said builder sentiment remained unchanged (and is at its lowest level since March 2009 for the second month in a row). Second, although housing starts are up 25 per cent from their lowest point in April 2009, they are still down 74 per cent from their peak in January 2006.
That’s not THAT troublesome to me. I don’t think we should expect the US housing market to see the levels they were seeing in 2006. Frankly, if the US reached that level again, they’d be liable to experience another bubble. And, I think the entire world can agree, that we don’t want that.