Content: Long Island Construction Law did not create this content. This article was written by The Associated Press, and was published to the Long Island Business News on April 16th, 2020.
U.S. home construction activity collapsed in March as the coronavirus spread, with housing starts tumbling 22.3% from a month ago.
The Commerce Department said Thursday that groundbreakings occurred last month at a seasonally adjusted annual rate of 1.2 million units, down from a 1.56 million pace in February. Construction of single-family houses fell 17.5%, while apartment and condo starts were off 32.1% from a month ago.
All of this paints a bleak outlook for housing as the lockdown to contain COVID-19 have led more than 20 million Americans to lose their jobs in the past four weeks.
There was a 6.1% decline in the completion of home construction, which means many homes are being left half built. The drop was 15% of single-family houses, meaning that unless economic activity picks up soon there could be ghost towns half-built housing developments, an phenomenon last seen in the aftermath of the 2008 financial crisis.
Construction activity will likely continue to slow. There was also a 6.8% drop in permits to begin construction in March.
Home builders have become fearful. A confidence index released Wednesday by The National Association of Home Builders and Wells Fargo plunged 42 points in April to a reading of 30, the largest single monthly change in the history of the index. Any reading below 50 signals a decline.
John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: John@LIConstructionLaw.com or (631) 608-1346.
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Content: Long Island Construction Law did not create this content. This article was written by The Associated Press, and was published to the Long Island Business News on April 16th, 2020.
