News / USA

Home Construction Industry Suffers in Dismal US Housing Market

A construction worker puts a roof on a house in a western suburb of Chicago, (File).
A construction worker puts a roof on a house in a western suburb of Chicago, (File).

Multimedia

In 2010, about 323,000 new homes were sold in the United States.  That’s the worst year on record since 1963.  The dismal housing market in the United States, flooded with abandoned properties and foreclosures, has forced many out of the home construction industry.  The building suppliers and construction workers who remain in the U.S. Midwest are trying to deal with the worst economic environment their industry has seen in decades.

Builder Hal Stembridge started his construction business in 1979, during a recession, when interest rates were high and fewer new homes were constructed.  Nothing he learned then could prepare him for what he’s dealing with now. “People say that it’s a recession when your neighbor gets laid off, it’s a depression when you get laid off, well this is just devastation," he said.  "This is just coming out and wiping everybody in the trades… it’s just wiping everybody out.”

Stembridge is one of the few home builders in suburban Chicago still actively seeking the few customers who want to build new homes.  He is fighting to say afloat, and directs some of his anger at the government.

“They’ve bailed out the banks.  They’ve bailed out Wall Street.  They’ve bailed out the car companies.  But the largest employer in the United States is still suffering and that’s homebuilding,” Stembridge noted.

About 54,000 new homes were built in the Chicago area in 2005.  So far this year, only about 3,000 building permits have been issued to start construction on new housing.

Brandon Weiss got into the new home construction business at the height of the boom.  Now in the bust, he is surviving by retooling. “But kind of as the market dissipated in new construction, we had to find other ways and alternative measures of making ourselves relevant today.  So we definitely went into remodeling as kind of a focus point for a while.  We’re still there,” he stated.

Weiss purchased his recent remodeling project in a foreclosure.  Now completely renovated, this house is one of the most energy-efficient homes on the market in Elgin, Illinois.  It’s still for sale. “It’s tough right now.  Showings are really slow.  But I think that’s just market wide, not specifically on this house.  It’s just the market in general right now.“

The dismal housing market has a ripple effect all the way up the supply chain to independent retailers like the Edward Hines Lumber Company. “Hines at their peak was at 27 locations," he explained. We’re down to four.”

Doug Jones is the President of Hines Lumber.  “At the high point of Hines, they had over 1,200 employees.  We’re a little over 100,” Jones said.

Jones says the low point for Hines in 2008 was 60 employees, but hiring has picked up, thanks to new investment in the company.

But Jones’s small, independent building supply company still competes with bigger retail stores and other small suppliers for the business that remains. “The new home construction, at least in Chicago, is down over 90 percent from where it was in 2007.  So there are still enough suppliers out there but not enough people building homes.  It just makes it tough.  There’s not enough to keep them going,” he said.

Builder Stembridge says there would be enough to keep them going if the government stepped in to help. “The bottom line is each new home provides three jobs for one year in the U.S. and creates about $90,000 in tax revenue.  I don’t understand why the government doesn’t get behind new home construction [and help them get] back up on its feet,” he stated.

Even interest rates at record lows (below five percent) have not encouraged people to buy or build new homes.  And with unemployment rate in the U.S. at over nine percent, potential buyers are concerned about their jobs, and whether or not they can afford the mortgage that comes with home ownership.

You May Like

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs