The housing starts for May came in a good bit lower that expectated. And a good bit lower than the previous month.
Yesterday the NAHB (National Association of Home Builders) announced that builder confidence had dropped.
Today we see the reason. From the May Residential Construction report
"Privately-owned housing starts in May were at a seasonally adjusted annual rate of 593,000. This is 10.0 percent (±10.3%)* below the revised April estimate of 659,000, but is 7.8 percent (±9.7%)* above the May 2009 rate of 550,000."
Expectations were 655k and the forecast called for 680k. Big difference.
The drop in housing starts from the previous month and from market expectations will probably help mortgage rates for today, but it is not good news for our economy in general.
Now we have talk of a double dip in the housing recession. And it may indicate that the tax credit did not kick start the housing market enough to overcome the surplus supply of homes and the shortage of qualified home buyers.
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Richard Smith |
American Acceptance Mortgage, Inc |
FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation
Home financing in Tennessee and Georgia.
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Richard Smith Conventional, FHA, FHA 203k, HUD $100 down purchases, VA, Jumbo VA, Rural Development, Jumbo, FannieMae Homepath, Home Equity Line of Credit (HELOC). |
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I agree that this all has to do with the tax credits. The tax credits did nothing but delay the actual recover of the housing industry. They needed to work on stopping foreclosures and helping these families first, that would have kept the inventory down and helped a lot more than a tax credit which just costs us all in the end. (Someone has to pay that $8000)
Todd,
I am so glad you said that. That is exactly correct. The tax credit was the wrong approach - not addressing fundamentals in housing and in my opinion not addressing lending issues that might have helped bring more qualified buyers back. You are absolutely right.