New-home slowdown is good news

WASHINGTON – Dec. 19, 2007 – You’d think the chief economist for the National Association of Home Builders would be alarmed that the pace of new-home construction in November dropped to the lowest level in more than 14 years, according to a Dec. 18 Commerce Dept. report.

But David Seiders, the NAHB’s chief economist, says he’s somewhat pleased. Builders cannot reduce their inventories of unsold homes unless they cut production, particularly in light of weak demand and rising competition from existing-home sellers, he said.

“The builders are behaving appropriately at this point,” Seiders said. “I would have liked to see the production decline start earlier than it did. But since the beginning of 2007, production has been falling rapidly.”

Builders suspend projects

Foreclosures drop 10 percent in November

WASHINGTON – Dec. 19, 2007 – A surprising new report suggests that U.S. home foreclosures actually declined 10 percent in November despite signs that the housing slowdown is worsening in much of the nation.

In November, there were 201,950 foreclosure filings – default notices, auction sale notices, and bank repossessions – down 10 percent from October, the first double-digit monthly decrease since April, 2006, Irvine [Calif.]-based RealtyTrac said Dec. 19. But the foreclosures are up nearly 68 percent from November 2006. The U.S. foreclosure rate is about one filing for every 617 households.

“This could indicate that foreclosure activity has topped out for the year,” RealtyTrac Chief Executive Officer James Saccacio said in a prepared statement. But “the true test of whether this ceiling will hold will come at the beginning of next year when we anticipate that a seasonal surge in foreclosure filings and another possible wave of resetting mortgages could place further pressure on the housing market.”