New Home Development -- Really are they building new homes?

There has been a 5.8% rise in new housing starts in April 2010.  But overall new home development is about two-thirds the average during the 1990's.  

The current increase in new home development is due to buyers having trouble purchasing foreclosures and short sales, they are taking too long and are difficult to close.  

Harris Bank estimates there are about 6.35 million houses vacant today.  This is a huge jump compared to the 10-year average of 5.24 million.

Home prices will not rise until the vacant homes come down.  

Jack Ablin, Harris Bank's chief investment officer, says "We still have more than a year to go. That is based on how many houses sit vacant, are being added to the market, and new households created." 

Altos market research shows the 90-day Market Action Index stands at 11. With several months of inventory available at the current sales rate, buyers should find ample choice.  When the 90-day Market Action index is under 6 then it is a seller market.

This information was taken from the Seattle Times article "Empty homes clogging the market", by The Associated Press on May 29, 2010.