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Construction Industry Shows Signs Of Recovery.
June 23, 2010
The economic recovery seems to be gaining strength if the recent rise in construction spending is any indication. On June 1, the US Commerce Department reported that construction industry spending was up 2.7 percent with gains in all major sectors. A separate government report released May 18 stated that new home construction increased to a seasonally-adjusted rate of 672,000 units annually – a rise of 5.8 percent from March 2010 and a staggering 40.9 percent increase over April 2009.
Weakness in the construction industry has been one of the largest drags on the economy as it tries to recover from what is regarded as the worst US recession since the 1930s.
April was the last month in which first-time home buyers could qualify for a federal tax credit of up to $8,000."The expiration of the federal tax credit at the end of April probably created a little bit of a surge," stated Jackie Mise, Mortgage Banker at Ameris Bank in Moultrie, GA. "Nevertheless, this increase still shows that people have a positive outlook, and banks are lending money."
A key indicator in the health of the construction industry, new construction of single-family homes rose 10.2 percent over the month to an annual rate of 593,000 even though construction lending can be difficult forconsumers to understand and even harder to attain.
Lenders like Ameris Bank have responded to the rise in new construction and the demand for attainable financing with new loan products specifically tailored to meet the needs of a consumer who is building a nehome. Mise continued, "There is a high demand for construction lending that is understandable and available to consumers. Many of our customers are relieved to find out that there is a loan product that fits their needs particularly those who take advantage of Ameris Bank's Construction to Permanent loan product."
A Construction to Permanent loan is financing that allows the consumer to take draws on the loan liketraditional construction financing.With a simple modification, it converts to a conventional mortgage after theconstruction phase is complete without a separate closing and the associated costs.
Economists predict that construction and home purchases will level off behind the tax credit, but remain hopeful that increased spending will last giving the economy the boost it needs for recovery.
Ameris Bank is an equal housing lender and Member FDIC.
For more information contact:
Steven Sturm
(803) 733-2699