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Foreclosure Homes for Sale Continue to Hold Homebuilders Back

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By : John Cutts    99 or more times read
The huge supplies of foreclosure homes for sale in the U.S. continued to weigh down home building last year. The house construction market has been in poor condition for two years now, with 2011 expected to be much the same as previous periods. According to real estate experts, any improvement in housing starts this year will be minimal.

Housing market analysts are predicting that the home building industry will need two or three more years before it can return to normal levels. According to them, the presence of pre foreclosed homes and distressed residential properties is aggravating the problems of the home building market by taking a chunk of its market share.

Furthermore, high unemployment rates all over the country are resulting in lack of buyers interested in purchasing new houses. Experts stated that for the very few willing to go into homeownership, most are opting for cheaper properties offered at foreclosure auctions. Also, majority of the unemployed in the country are from the building sector and other industries related to the housing market.

Economists revealed that in the past, home building is often at the forefront of pulling the country back from a recession. However, this time, the same might not be possible. According to real estate experts, house builders are unable to mount a sustained recovery because of high unemployment rates and oversupply of foreclosure homes for sale, which prevent home builders from finding markets for any structures that they can build.

To top it all, lenders repossessed homes at record rates last year, and these unsold properties remain in their books with nowhere to unload them. Activities in the home building sector recorded their lowest levels in 2009-2010 since the late 1950s. Last year, builders started construction on over 587,500 residential properties, a slight improvement from the 2009 total of 554,000, but sill way below healthy levels. Under normal conditions, home building projects total around one million and a half annually.

Analysts stated that the problem of the U.S. home building industry will not be alleviated by mere decline in foreclosure homes for sale. The unemployment level should also decline and the national economy should recover enough to finance home building projects all around the country.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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