By: Gaurav Bhola, MSM, Managing EditorNew home construction was ahead of the housing market slowdown for many months. The correction in the residential real estate market saw homebuilders become worried as sales of new homes slowed and inventory piled up. Herein, construction of new homes slowed significantly. Now it seems that construction of new homes and apartments is gaining some lost momentum, October saw the biggest unexpected rise in new construction in eight months. Could this be a signal of a turnaround? Maybe, but a sustained momentum is unlikely until the end of next year, according to analysts.
Industry analysts foresee opportunities for growth in the housing market at the end of 2008, beginning of 2009. They also see this as a boon for home buying, a rare opportunity for home buyers to have leverage in home price negotiations and choice of homes.
However, the rise in new construction is good news followed by a jump in mortgage applications in the first week of November. The Commerce Department reported that housing construction increased by 3 percent in October. This rise was the first after three months of wane and the largest advance since last February.
But a closer examination of the Commerce Department's data showed the increase in construction can be attributed to new apartment construction, which jumped by 44.4 percent.
A good outlook for home buyers should be good for the fledgling mortgage lenders and mortgage brokers. One consequence of the subprime mortgage fiasco has led to a rise in foreclosures in the residential real estate arena.
On the other side of the same coin, this has created an opportune moment for home buyers to seek out bargains, unheard of in the housing boom for the recent past.
Existing homeowners who financed their homes during the boom times with adjustable rate mortgages and interest only mortgages are converting their home loans to fixed rate mortgages through mortgage refinance.
The overall capacity of choice for home buyers is immense. Currently, prospective home buying is being done by some of the public with due consideration, due to the availability of homes.
Lower mortgage rates have helped provide momentum to many buyers to come out from the sidelines and purchase homes. As home prices have gone down from the highs of the recent past, further corrections are anticipated in home prices.
Many experts see further opportunities for buyers in the near future. This is likely as buyers see home prices reach levels of more affordability.
