Thursday, December 23, 2010

Smaller Builders are the Foundation of the US Housing Industry

According to a new study by economists at the National Association of Home Builders (NAHB), small home builders are the mainstay of the nation's housing industry, including a sizable number of self-employed mom-and-pop operations.  "We are seeing market conditions returning to normal in many parts of the country after a long, hard downturn, and these companies have the agility to move quickly and start leading the economy forward," Bob Jones, NAHB chairman, said. "But first they need access to financing to build, which remains scarce during this critical phase of the recovery."

The report concluded, "The residential construction industry is very dynamic, and a large number of firms enter the industry each year and a large number exit each year.  With few barriers of entry, start-up builders can launch their business with a single new home. Most home builders and remodelers are small businesses, further facilitating movement into the industry when opportunities improve, and exiting either because of business failure or life-cycle decisions."  In addition, a much higher share of small businesses both enter and fail in the residential construction industry when compared to all U.S. firms, according to the report.

NAHB estimates that the ratio of the income of usually small, self-employed independent contractors to wages and salaries generated in the construction industry is one to four. This is compared to a ratio of one to 10 in some other industries, such as manufacturing.  Housing also provides more opportunities for Hispanic businesses than U.S. industries overall, the study found.

For ideas on where and how you can purchase a new home in Mercer County and surrounds, call or email me.  There are many builders who want your business.

Joe Giancarli, SA
Real Estate Advisor

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