The Commerce Department revealed this week that new homes built this month have risen 1.6 percent, more than was expected, during the month of March. This is the highest level of housing starts since November 2008 and it can mean great things for the Default Research clients.
First, it indicates a growth in the economy, and such an indicator can only be a positive! For each new home built, the economy sees three new jobs for a year, according to the National Association of Home Builders. Not to mention a nice increase of local taxes paid. Although it seems simple, it is worth repeating. According to FX-Words, “A sharp drop in new home construction is a warning signal of economic slowdown. Conversely, a rebound in the Housing Starts paves the way for economic recovery.” As ground breaking for new homes increases, the purchases of foreclosure properties will follow suit and money more readily passes from pocket to pocket.
Although the glut of foreclosures across the nation has been cited as one reason for the lack of housing starts in the recent past, this increase will not have a backwash negative effect on the foreclosure industry as that is not forecasted to slow down any time soon.