Thursday, June 9, 2011

NAHB ECONOMIST SEES BLEAK 2011 FOR BUILDERS

With the housing market faring poorly, the top economist at the National Association of Home Builders lowered his forecast for home construction this year.

David Crowe, NAHB Chief Economist

Builders are likely to break ground on 582,000 homes this year, down slightly from 585,000 in 2010 and a far cry from a peak of more than 2 million in 2005, David Crowe, the NAHB’s top economist said Wednesday. Crowe also forecasts that builders will start construction on only 431,000 single family homes this year — the lowest level of the housing bust.

That translates into only 17,250 new modular homes being built this year or about 87 homes per factory.  That's 1.67 homes a week or only 5 modules put on the floor every week.  OUCH!

In an interview, Crowe said the start of the year was “much worse than I expected,” noting that overall economic growth was weak, the labor market grew less than forecast and consumer confidence hasn’t picked up. High gasoline prices, he said, are “just a joy-killer” that makes consumers less interested in purchasing a new home.

At the start of the year, Crowe expected a much healthier rebound. At the time, he was forecasting builders would start construction on 575,000 single-family homes this year.

The housing market has been a consistent source of weakness for the U.S. economy, and builders have been hit hard.

2 comments:

William said...

Coach, where did you the the number of 198 modular factories. I got this number by dividing the total number of modular homes you listed (17,250)by the homes per factory (87). I cannot recall when the industry had that large number of modular factories.
Please explain.

Coach said...

William, you are probably right that there are no longer 200 mod factories in the US. I used a number that was valid before the housing crisis and I know they a lot of plants have closed or have been mothballed.

But even if the factories built 3 homes a week, that is only 7-8 floors going into production every week and that's not near enough to keep some of the bigger factories profitable.