House Construction Expects a Boost
The economic crisis has gotten from bad to worse in the past weeks. According to Ivy Zelman, the CEO of Zelman & Associates, the current financial situation right now have actually been worse than what people have imagined. With this, the house construction industry has been taking defensive measures to keep their profits coming.
Some home builders have been changing their incentives for customers, which include discounts and upgrades, as well as payment and financing protection programs. Still others take action by cutting down the numbers of new houses that they build.
The federal government has also made some moves to alleviate the current downturn on the economy. It has a new economic package that is set to assist construction industry players. A new $8,000 tax credit designated to first-time home buyers is now included in the stimulus package. Also, the Federal Housing Administration has been giving new loan terms that are more attractive than ever before. Zelman says that these moves are actually helping the house construction industry, saying that instead of being hopeless, the industry is experiencing some light that can be coming from these actions.
As a matter of fact, the share prices of construction companies have already increased a bit since the start of this year, after experiencing a sharp fall in March. A lot of construction companies have been experiencing this, with rises ranging from 8 to 14 percent. Even if these statistics are still way below the data which can be considered positive, this is a sign that there is still hope for the industry.
Sales of houses that were newly constructed have also risen in the past weeks. The Commerce Department in fact reported last week that the sales last week exceeded the expectations of experts. A lot are now expecting and asking whether or not the housing industry, and the construction industry, is actually heading their way to recovery.
The house construction industry, more specifically, is expected to be the first to recover from the economic crisis. According to Nishu Sood, an analyst from Deutsche Bank Securities, the housing industry is actually dominated by people who are buying their houses for the first time. This therefore increases the chances of new houses to be built and constructed, showing greater favor for the new home construction industry.
