In what may be a sign the nation”s housing recession is beginning to bottom out, nationwide, construction of new homes jumped in May by the largest amount in three months.
But the situation is worse in Columbus, with still slowed residential construction, despite favorable building factors, local developers noted.
The U.S. Commerce Department Tuesday reported nationwide construction of new homes and apartments jumped 17.2 percent last month.
In another encouraging sign, applications for building permits, seen as a good indicator of future activity, nationally rose 4 percent in May.
But applications for building permits in Columbus tell a different story.
“We”re seeing practically a stoppage on single-family dwellings,” said Columbus” Zoning Officer Kenny Wiegel. “We do have several upcoming apartment projects that look like they”re going to happen. And, commercially, it seems like we”re still pretty busy, as far as permits. As far as residential, single-families have really slowed down a lot.”
“We”re not doing any new residential work; we”re still a little slow,” said Lance Conn of Conn Construction, who serves as president of the Golden Triangle Homebuilders Association.
“Who knows?” he responded, when asked to predict how long the slump will last. “Until the banking business loosens up and starts passing a little credit, letting people get some new homes, it”s not going to pick up.”
“We”re beginning to see a little pick-up on it, but I don”t think it”s anywhere near 17 percent,” Lowndes County”s District 3 Supervisor John Holliman, who also is a developer and past president of the Golden Triangle Homebuilders Association, said of residential construction in Columbus and Lowndes County. “It”s still pretty slow and mostly, I think it”s just because people are scared with the economy like it is. But, because the interest rates are great and materials are down, it”s really a good time to build.
“When interest rates start going back up, they”ll realize they should”ve (built) then,” he laughed, when asked when he expects the market to change. “I think by mid-summer, things will start picking up again.”
“We”ve seen a slight increase in the last month,” said Danny Sprouse of Sprouse Construction Co. “It”s starting back up, it looks like. It”s been slow, real slow. But our activity is up some. It is a good time to build; prices are down. The demand is just not there right now. I think that”s the overall economy. They”re predicting, next year, for it to get back in the swing.”
Even with the national jump in new-home construction, analysts don”t expect a quick rebound in housing, since the economy still is shedding jobs and home prices are falling in many places, making people hesitant to commit to buying a new home.
The current recession — the longest since the Great Depression — was triggered by a collapse in the housing market, leading to soaring losses and a banking-system crisis.
A healthy home market is needed to support an economic recovery.
Many economists say home construction likely will stop falling in the current quarter but any sustained rebound isn”t expected to take hold until next spring, due to the huge overhang of unsold homes and a record wave of mortgage foreclosures dumping more unsold homes on the market.
The 17.2 percent rise in housing construction for May still left activity 45.2 percent below where it was a year ago.
The jump reflected a 7.5 percent rise in construction of single-family homes, the third consecutive increase in this critical segment of the market.
Construction of multifamily units rose 61.7 percent in May to an annual rate of 131,000 units. This volatile part of the market plunged 49.4 percent in April.
Construction rose nationwide led by a 28.6 percent surge in the West. Construction rose 6.8 percent in the South and 11.1 percent in the Midwest. The Northeast had the smallest gain of 2 percent in May.
The Associated Press contributed to this story.
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