Housing Construction Headline
What caught my attention today was an Associated Press article titled “Housing Construction Falls in May.” It discusses the housing slump that many home builders are experiencing. Stating that the Commerce Department reported that construction of new homes and apartments dropped by 2.1 percent last month. I wanted to see how New Mexico stacks up against the nation. I contacted the New Mexico Home Builders Association and spoke with Melanie Teeter, Government Affairs Director and she explained to me that general construction permits are tracked by the Census Bureau. She stated the numbers are several months behind, but that new residential construction building permits, housing starts and housing completions can be found on the census bureau website. In New Mexico single family permits issued in 2007 through the end of April were 2994. When I checked 2006 permits issued through the end of April there were 4469 and in 2005 there were 4080.
I asked Melanie for a feel of the construction industry in New Mexico and she stated, “Production builders are slowing a bit, in Albuquerque and Rio Rancho the production builders have slowed somewhat but not as slow as other parts of the nation. Custom home builders have not seen much of a slowdown at all.” We went on to discuss the rising cost of home construction materials with the price of concrete and steel rising to staggering amounts.
Back to the associated press article I wanted to share a couple of paragraphs that really caught my attention. “The problems in housing reflect the end of a prolonged boom period in which sales of both new and existing homes set records for five consecutive years. When the boom ended in 2006, builders were left scrambling to deal with record levels of unsold homes. The inventory glut has been worsened in recent months as buyers who stretched to purchase homes during the boom years are now going into default at record levels, dumping more homes back on the market.” The article goes on to state that by region construction activity fell by 19.7 percent in the West.