By Zachary Vollmer, Real Estate Account Executive
The U.S. Department of Housing and Urban Development has released a report today revealing that construction of new homes and apartments decreased by 10% in May to 593,000 units. This decline is the lowest since December of 2009 and is dashing hopes that the construction industry will help fuel an economic recovery. Applications for building permits, a bellwether of future activity, dropped 5.9% to 574,000, which is the lowest level for 2010. During past recessions the construction industry has helped fuel growth, but this has not been the case this time as developers are still wading through a backlog of properties from the past real estate boom. These statistics fly in the face of the predications of economists who forecasted increases in both the number of newly constructed homes and building permits requested. Home builders may be wary about the potential for a decrease in future home sales because of the expiration of first time home buyers credit in May and the ever growing inventory of foreclosed properties.