Wednesday, March 5, 2008

As foreclosures rise, new home construction falls

There's increasing evidence that rising numbers of foreclosures are having an adverse effect on new home construction, not just the re-sale market, says economist Fred Crowley of the University of Colorado at Colorado Springs. This chart Crowley assembled shows rising numbers of Colorado Springs and El Paso County foreclosures depicted by the red line, with single-family home building permits in blue heading in the opposite direction. When home buyers can find a foreclosed home for sale at a discounted price, they might be less likely to buy a new home, Crowley said.

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