Real Estate Blog
Wednesday, June 08 2011
Construction spending in April posted its biggest gain in six months — getting a boost by spending on home remodeling.
While overall construction spending increased only slightly by 0.4 percent in April, the increase in spending on home improvements helped offset some drops in single-family homes and apartment construction, the Commerce Department reported Wednesday.
Construction spending for residential homes increased 3.1 percent in April mostly due to the uptick in home remodeling, the Commerce Department noted. Instead of buying a new home, more people seem to be opting to remodel their existing home. The National Association of Home Builders recently reported that the home remodeling industry saw some of its biggest gains in more than four years. NAHB’s remodeling index recently reached its highest level since the fourth quarter of 2006.
Meanwhile, construction of single-family homes dropped 1 percent in April, the Commerce Department noted. On the other hand, nonresidential construction increased slightly by 0.4 percent for the month, with the increase mostly attributed to a rise in spending on health care, schools, and power plants.
Overall spending on construction projects in April remains far below the $1.5 trillion annual amount that economists consider healthy for the sector. In April, construction projects totaled a seasonally adjusted annual rate of $765 billion — only slightly above the 11-year low reached in February of $761 billion.
"The overall story here is that housing is hugely depressed, but it has probably hit bottom," says Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Source: “Builders Began More Remodeling Projects in April, But Construction Spending Near 11-Year Low,” Associated Press (June 1, 2011) and “Renovations Lift U.S. April Construction Spending,” Reuters News (June 1, 2011)
Wednesday, February 09 2011
Most home owners opt to add some upgrades to a new home, which can be rolled into the mortgage opposed to paying for them later on their own. But the choices of what flooring, lighting, or other upgrades to choose can be overwhelming.
Designer Candice Olson, author and host of HGTV's "Candice Tells All," says lighting and extra wiring are key upgrades new home buyers should consider.
"Adding lighting -- or at least the wiring for it -- means you'll be able to have bathroom sconces instead of that one overhead light the builder gives you,” Olson says. “Your flat-screen TV can be where you want it. You'll have a floor outlet for the lamp in middle of the open room. And you won't be ripping out walls later to do all this."
Also, she says home owners shouldn’t forget about the exterior lighting either. "Outside lighting, plus landscaping, will set apart your house from the others in the neighborhood where buyers chose from plans A, B and C," Olson says.
As for flooring, Olson recommends hardwood floors for the main living areas, and cork floors for the basement, since there’s potential for water leakage in basements.
She also says the addition of taller baseboards, chair rails, crown molding, coffered ceilings, built-ins or a banquette also are smart investments for upgrades.
Source: “Decisions, Decisions: Add Character to Your Home With a Few Choice Upgrades,” Chicago Tribune (Feb. 4, 2011) http://www.realtor.org/RMODaily.nsf/pages/News2011020906?OpenDocument
Sunday, February 21 2010
The first-time homebuyers' tax credit, along with low interest rates and home prices, may have led to builders feeling a bit better about the market for new, single-family homes.
According to the latest National Association of Home Builders/Wells Fargo Housing Market Index, builder confidence increased to 17 in February, up from the 15 reported through the index in January.
NAHB chairman Bob Jones said that a variety of factors, including the tax credit made available to first-time homebuyers, makes it attractive for consumers to buy homes at this time.
"As a result, builders are slightly more optimistic that the housing recovery is finally beginning to take root," Jones said.
Through the tax credit, first-time homebuyers have an $8,000 incentive to purchase a home, provided they sign a contract for the home by April 30. If they do so, prospective homeowners have until June 30 to complete the purchase.
Along with first-time homebuyers, the tax credit was expanded last year to include people who are purchasing a new permanent residence. Those buyers may qualify for a tax credit of $6,500, provided they sign by April 30.
Though the index did increase in February, it is still far from a level that might indicate more wide-spread confidence in the housing market. To calculate the index, builders are asked to rate both current and expected sales of single-family homes, while also being asked to gauge the amount of traffic they are getting from potential buyers.
A reading on the scale above 50 means that the number of builders who see conditions as "good" outpaced the number who see them as "poor." Though the index is still below 50, the 17 posted in February is the highest mark seen on the index since November 2009.
Wednesday, December 16 2009
Home building rose 8.9 percent in November to an annualized rate of 574,000, the U.S. Commerce Department announced Wednesday.
The rate was still 12.4 percent below what it was in November 2008, but the increases were nationwide, with the Northeast leading the trend with housing starts rising 16.4 percent. Housing starts rose 12.3 percent in the South, 3 percent in the Midwest and 1.9 percent in the West.
Analysts attributed the increase to the extension and expansion of the home buyer’s tax credit. David Crowe, chief economist at the National Association of Home Builders, is cautiously optimistic. “The new credit will have an impact as we move into 2010 and consumers plan for that credit availability, and builders begin to answer expected demand in the spring," he says.
Source: CNNMoney.com, Hibah Yousuf (12/16/2009)