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New Home Construction

In: Other Topics

Submitted By biker14
Words 642
Pages 3
Econ Paper on New Home Construction Working in the construction industry is a challenge at times. Price increases of materials for New Home construction, economic changes in the economy all play a vital role in the construction business. “ In 2007 the New Home construction was probably at its highest level with New Home sales somewhere around 9 million homes across the United States. Then the recession hit, and the demand for New Homes was on the decline, and continued throughout 2011. There was a slight peak in 2010; however that was short lived. There was not much movement in New Home starts till 2012 which has shown a gradual increase continuing into 2013, with New Home sales somewhere around 4.4 million”. (National Economic Indicators, 2013)

During the height of the housing boom, homes were overpriced; mortgages were givin based on continual expectancy in employment along with increased income expectancy. Then the economy took a turn for the worse, and the Recession was here. In 2007 the unemployment was around 4.5% and started rising through 2008, and in 2009 it was roughly 10% where it stayed at that level till 2011, where we saw and return to employment for many workers and the unemployment rate continued to decline to about 7.9% in January of 2013. With the economy in a spiral downward, unemployment high, the housing industry was hit hard. New Home construction came almost to a standstill. Homes that had been started were not being sold, because no one could afford to buy. Mortgages Lenders were not lending money because of all the foreclosures, and they were taking a hard hit for all the over inflated valued homes from prior years before. This led to a surplus of homes in the market, with a swing to the left of the supply and demands were on the left side, almost nothing. With unemployment the...

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