In the past few months, increased amounts have been spent on construction. But the scenario really is not as good as it seems because home inventory continues to dwindle. There are just are not enough homes being constructed and the supply is continuously falling short of the demand, not just in Houston, but throughout the nation.
Considering the last four years, the month of October recorded the highest amounts being spent on construction in this period, probably because of the increased numbers of ongoing government projects. However, in terms of home construction, the stats showed a decline, and the same was observed for commercial projects. Overall, the values increased by 0.8% in October to reach a yearly rate of almost $908 billion. In September 2013, the value fell by 3%.
The pace observed in October was the best since the month of May, 2009. Public spending increased by 3.9%, and federal spending by nearly 11%. According to these stats, it is quite clear that the 16 day government shutdown did not really have a notable impact on public projects. The figures for local and state government construction also showed a rise.
Unfortunately, for home construction, there was no rise and the values just decreased from past month. In the month of October, this decline was by 0.6%, mostly accounting to the fact that the construction of single family homes has dropped.
These values have been observed in the past few months, but if you consider the stats of last year, the figures show a different trend. Compared to the same period last year, home construction has actually increased by 17.8%. Ever since the financial crisis, this is the highest value that has been recorded. The industry experts do predict this trend to continue, but if you consider the overall construction industry, the stats are not exactly that great right now.
According to a real estate professional, home construction can increase if more single family homes are built. The dip is probably just temporary and would cease to exist in the time to come.
Other experts in the industry have similar opinions and believe that more single family homes will be constructed in the next few months, even if that is not right now. These homes take up almost two third of the construction marker, and if their stats alone could improve, the overall stats would be much better.
Source: www.realestate.aol.com
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