Housing Waits for Job Market

by bkrigbaum@solagroup.com

The National Association of Home Builders
predicts 2011 and 2012 as the years home builders will be able to shrug
off all the recession’s affects, according to its Construction Forecast
Webinar from the end of October.

The reason for the wait? The job market. According to economists, a
healthy job market will encourage consumers to buy homes and also allow
them to buy homes. This must happen first, though.

The economic conditions are unique in that factors that encourage
recoveries in past recessions may not work today. NAHB news release
cites: “While typical post-war recessions have been followed by a
‘robust rebound’ in both economic output and
housing — achieving ‘a teeter-totter balance’ in the
business cycle — ‘unfortunately, it’s not
going to happen this time,’ said NAHB Chief Economist David Crowe.”

The last two weeks, news was released that new housing starts
and existing housing starts increased
in September. NAHB
says that home builders cut their production during the recession so
they now have the correct amount of inventory for the recovery.

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