According to the latest report by Metrostudy, a housing market research firm, the December 1 sunset of the $8,000 federal tax credit program for first-time homebuyers may reverse the recent gains in housing starts.
Brad Hunter, chief economist and national director of consulting for Metrostudy, said in a news release, “We believe that some of the recent gains in housing starts could be given back during the third and fourth quarters of this year if the current tax credits are not extended,” and “That said, the forecast for 2010 is for steady increases in starts.”
Metrostudy’s report comes one day before the U.S. Department of Commerce releases national housing start figures. Hunter said the report is expected to say that September starts were up for single-family homes, but multifamily starts were down.
Homebuilders are finally working through inventory prompt by speculative investment during the prior boom, a process that will continue for some months. Metrostudy projects next year will see a steady uptick in starts.
Hunter said, “Most markets have been improving since last spring, but some of the hardest-hit bubble markets, such as Florida and California, have only recently started to see increases in starts”. “Those lagging markets will probably start to experience increased homebuilding activity in 2010.”
Metrostudy predicts for 2009, a total of 562,000 housing starts, which represents a 37.9% drop from the year before. In 2008, single-family starts are forecast at 438,000, down 30% from 622,000.
Contributed by MLR Realty
Home