14101 Mon, 03/24/2008 - 3:36pm
While it’s no surprise to anyone in the home industry, housing starts are not what they used to be. What should be a cause of concern, however, is the 25 percent drop in housing starts in 2007. This percentage is even more severe when coupled with the 13 percent drop in 2006.
Prior to 2006, housing starts had been on the rise for five solid years and had only seen small decreases in two of the five years prior to that. In addition, the floor area in new one-family homes dropped in 2007 for the first time in more than a decade. The drop here may be very small, but it is still reflective of the changing scene of the housing market.
Another aspect not to be ignored here is the abundance of foreclosures that have made headlines of late. Not only are fewer new homes being built, but consumers are being forced in record amounts to turn over the homes they once thought they could afford. The home furnishings industry continues to feel the burden of consumers who have lost or are in danger of losing their homes and the extended effect such news is having on the buying population as a whole. Executives have noted consumer confidence tends to drop when a consumer simply knows someone who has encountered difficult financial times—from a job layoff or a foreclosure, for instance—even if the situation has no effect on his or her own situation. — Jennifer Quail