Real Estate Marketing & Beyond
Building companies increased their spending on the construction of new homes and offices during August, following a huge drop in spending the month before, said the Commerce Department earlier this week.
Construction of new homes in the U.S. has virtually ground to a halt © Ahileos - Fotolia.com
According to a report in the Washington Post, spending on construction in the last month rose by 1.4%, and saw modest increases in spending on both apartments and single-family homes. However, analysts were quick to point out that construction spending is still way below what would be considered a “healthy level”.
Construction activity in the U.S. was recorded at a seasonally adjusted rate of $799.1 billion, an increase of almost 5% on last March’s 11-year low. Still, spending is figured to be at only 50% of the $1.5 trillion that the industry deems to be healthy.
The Washington Post reported that experts say it could take another four years before spending on construction returns to healthy levels once more. New construction plans have been curtailed by the continuing bleak economy and the overall dismal outlook for housing’s immediate future.
In particular, the construction of new homes has all but stopped. The just-passed ‘peak home buying season’, traditionally summer, saw fewer homes purchased than any time during the last 50 years. Many Americans are just too scared to buy homes, as unemployment remains at more than 9% and many experts predict that housing prices could drop still further.
