The Federal Reserve recently released its latest analysis of regional economies within the United States, with good news for almost every sector except housing.
The ‘Beige Book,’ as the report is called, showed growth in manufacturing, energy, and technology sectors, but stated that residential markets remained at ‘very low levels’ across the country. A detailed account of the report can be found at the LA Times.
The news comes as no surprise to the construction industry, as building permits for single-family residential housing remains at record-low levels. As budgets continue to tighten and more homes fall into foreclosure, families are opting instead for apartment living, resulting in a relative boom for multi-unit housing.
But the housing market is still severely saturated, with banks withholding untold numbers of properties in fear of causing prices to plummet even further. Some analysts worry another housing crash is coming if these properties aren’t reintroduced to the market carefully, prompting many institutions to consider alternatives to the foreclosure process (rentals, etc.).
In that the collapse of the housing bubble was a major precipitator for the financial crisis and following economic recession, it’s little surprise that it’s one of the last sectors to experience significant rehabilitation, but for a struggling construction industry the numbers are far from encouraging.