Home Building Jumps in June Nationwide

News broke this morning that home building was up last month 14.6% from May which is a sign we're headed in the right direction. Although, it is mostly due to an apartment housing boom.  And, building permits were only up 2.5%, a fairly small number.  According to Fox News, an economy in a recession should have about 15 to 20 percent of its GDP coming from the housing market.  Right now, it is at 4%; the housing market is slowing economic recovery. 

The main reason behind this is foreclosures.  Because for every new home built, it generates about 3 jobs a year and about $90,000 in tax revenue, when building slows, so does the economy.  And, building has come to a halt because it is so much cheaper to purchase an existing home than a new home.  Foreclosures (and other existing homes) are priced cheaper than a contractor can build that home.

Nationwide, the median price on new construction is about 30% higher than that of an existing home.  This is exactly how Columbia sits as well, with about a 30% markup on new construction.  Median sales price in Columbia for the year for new construction is at $197,000 and for existing homes is at $138,500. 

It is good to see positive news about real estate in the media; I hope it tends to stay that way.  But, just know, it's only a small jump in the scale of the housing market. 

JK

Source: Fox News Article