New foreclosures are hovering around prior rates and old foreclosures are still sitting stagnant. Most people assumed that foreclosure sales would increase this year as so many properties are sitting and waiting to give a potential buyer a great deal. So far this year the number of foreclosure sales has been highly disappointing, but a surprising number of new home permit requests have been received.
What Does This Mean?
No one expected for new home builds to become possible this soon into the meager foreclosure crisis clean up, but many cities are reporting an increased number of permit requests. Although new home construction is far from what it once was, the new home builds are both promising and concerning to economists.
Home construction permits are up nearly 35% from one year ago, indicating that people are beginning to bounce back and attempt to tackle a wavering market once again. New home build permits mean jobs and jobs mean consumer spending, which also means economic growth and potential for future recovery. However, states with the highest reported home builds also are those with the highest foreclosure rates and current stock of empty properties. This is concerning for industry experts who are concerned about the fate of such properties. As more people gravitate towards affordable home builds rather than purchasing foreclosed properties, the real estate market is going to become saturated with unwanted properties. How these properties are going to be handled is yet to be seen and will be a first of its kind challenge for banks.