Wednesday, February 14, 2007

 

Number of vacant homes for sale surges 34%

This headline is from two weeks ago, but hey, I was on vacation.

"We have more than a million housing units of excess supply," said James O'Sullivan, an economist for UBS. "If you are looking for evidence that the worst is over for housing, you're not going to find it in this report. This argues that housing starts need to go down more."
In the past 12 months, housing starts have slumped 18% to a seasonally adjusted annual rate of 1.64 million.


So we have an over supply of houses, plus we're near an all time high in home ownership, and that supply is being added to. Look at the graph in the article to get some perspective on the size of the over supply. When you put this together with the fact that home construction/remodelling has been the driver of economic growth for the past 5 years then there is no doubt that the housing market is going to be a lodestone around the neck of the U.S. economy for some time.

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