Construction Improves, Yet Is Still Historically Low
click for giant graphic
Home Builders Spend More
Graphic courtesy of NYT

 

Norris:

“Home construction is booming in the United States, but it remains severely depressed.

That seemingly contradictory statement was illustrated by construction spending statistics issued this week by the Census Bureau. In April, spending on the construction of new houses and apartment buildings reached an annual rate of $195 billion. As can be seen in the accompanying charts, spending on home building is up 40 percent over the last year.

That is the largest such increase since the early 1980s. In the housing boom that preceded the Great Recession, such spending never rose more than 25 percent over a 12-month period. But that rate of spending is down more than 60 percent from the peak, reached in 2006, and is lower than spending as far back as 1997.”

Why do we keep shooting ourselves in our collective national foot?

 

 

Source:
Construction Improves, Yet Is Still Historically Low
FLOYD NORRIS
NYT, June 7, 2013
http://www.nytimes.com/2013/06/08/business/economy/census-reports-home-construction-has-improved.html

Category: Digital Media, Real Estate

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4 Responses to “Home Building Improving But Still At Low Levels”

  1. Chief Tomahawk says:

    “Why do we keep shooting ourselves in our collective national foot?”

    I suppose if we’d have regulations to deter such behavior then there’d be no third “i”s about (i.e. Warren Buffett’s idiots in the investing world) to take advantage of, and thereby making money would be a whole lot harder & less interesting (c’mon, isn’t it a hoot to watch folks make the case for High Frequency Trading adding liquidity to the system???)

  2. Vitus Capital says:

    BR: Is the foot we are shooting
    - That the total spending is way down from average, or
    - That the yoy spending rate is way up from average?

    Suspect the latter; sorry to be dense. Thnx.

    • bear_in_mind says:

      @ VitusCapital: I had the same question. I suspect he’s referring to is the parable of The Rabbit and the Hare: 1) Over-investment in single-family residences by TBTF institutions and FHFA to provide a quick boost to profits, while holding shadow inventory; and 2) Under-investment in Public Construction Spending (i.e. infrastructure) which are NEEDED projects that could be funded at historically low interest rates, and pay dividends that compounds over generations.

      • Vitus Capital says:

        @bear: -Tortoise- and Hare? :-) I did not think of the idea of over/under investing, only the specific graphs. Thanks for the nice distinction!