In one month, U.S. homebuilder industry has suffered its largest drop ever. The housing market has declined greatly due to the severe weathering affecting much of the nation, which is keeping potential buyers at home. The cold weather is keeping buyers out of the market across the nation. However, the bad weather will only slow down growth temporarily as the majority of consumers and firms are putting off their purchases. Therefore, if the temporarily slow growth is due to the weather then we should expect the trend will reverse once the temperatures turn higher and consumers want to spend again.
Weather isn't the only factor effecting the decline in U.S. homebuilder industry. There is also a lack of building resources - raw material and labor. The majority of workers are concerns about being able to meet future demand due to the shortage in labor, lots, and supply. NAHB Chief Economist David Crowe made a statement saying, "The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes."
http://www.usatoday.com/story/money/markets/2014/02/18/homebuilder-confidence/5578845/
Its amazing that now the climate is contributing so greatly to the economy. With the winter that we had just seen (one of the worst ones ever since I have been alive) I wonder if this will continue to discourage home builders well into the future. We always hear of the talk of global warming and the effect of pollution being detrimental to our world and causing extreme weather changes in places that shouldn't be affected. We saw the snow emergencies in the south in places like Georgia and South Carolina. This weather will likely continue to discourage people to build or it may just move them elsewhere. Places in the west such as Texas, Arizona, New Mexico, etc could see high rises in home builders if people choose to move out west away from the extreme weather.
ReplyDeleteI believe that this is applies to the neighborhood that I live in. Due to the weather no one has been able to build, leaving the neighborhood look like a dump. It will be interesting to see what happens once the warm weather does come around, since most of these home builders have been hurting.
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