Home building in Ohio is coming off the worst 2 years on record dating back 5 decades. Data in from May suggests that the trend is continuing. The construction of single family homes is a significant economic indicator. 80% of all residential construction is single family homes, and that construction is still way down.
Most of the housing permits for new construction are for apartments and condominiums which have become preferred housing with the relative ease of renting instead of investing in a new mortgage. For Americans who lost their jobs in the recession, and were forced to give up their homes due to foreclosure, renting is a safer, more secure option.
The impact of new home construction is felt around the entire local economy, as the purchase of a new home generates approximately 3 new jobs and $90,000 in taxes for the community. New home buyers also tend to spend more on purchases for the home like new appliances, furniture, landscaping, and home improvements. Apartment dwellers do not spend the same kind of money on their apartments.
Because of the large percentage of foreclosed homes in Ohio, resale homes are much more attractive to many home buyers than new home construction. Buying a newly constructed home in Ohio is about 34% higher than a foreclosed home, which is more than 2 times higher than it would be in a normal healthy housing market.
Until the majority of the foreclosed homes in Ohio are bought, and the mortgages reinstated, new home construction will remain low.