| New-Home Construction Up in March, CBIA Announces |
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Month-to-month increase suggests the homebuyer tax credit is working April 24, 2009 SACRAMENTO – New-home construction in California jumped sharply in March compared to February, which the California Building Industry Association said was a clear sign that the homebuyer tax credit enacted in the beginning of March is helping to clear out inventory and generate new-home construction. According to statistics compiled by the Construction Industry Research Board, 3,317 permits were pulled throughout California during the month of March, down 31 percent when compared to the same month a year ago but up 39 percent from February. Robert Rivinius, CBIA’s President and CEO, said the substantial increase in production over February indicates that builders are gaining confidence due to increased sales generated by the tax credit, but said that more needs to be done to keep the momentum going. “Our elected officials took a great first step in enacting the homebuyer tax credit earlier this year, for which we are very grateful,” Rivinius said. “It’s having the desired effect of stimulating homebuying, which in turn will generate construction meaning tax revenues for the state and local government, while putting people back to work. “But the allocated funds for the credit are being rapidly absorbed, which is why we believe a second round of the tax credit to extend it further would be extremely helpful in keeping the momentum going and reinvigorating the overall economy.” Rivinius cited reports from the Franchise Tax Board saying one-third of the $100 million allocated for the tax credit had already been applied for in the first six weeks since being enacted. In March, single-family permits totaled 1,790, down 43 percent when compared to March 2008, but up 37 percent from February. Multifamily permits totaled 1,572, down 10 percent from the same month a year ago, but up 41 percent from February. CIRB is now forecasting permits will be pulled for just 44,400 total units in 2009, which would be by far the lowest total on record, down 31 percent from the record-low 64,752 units produced in 2008. That forecast could go up, however, as new homebuyers re-enter the market. “After hearing reports of increased traffic and sales from builders and seeing month-to-month increases in production, we believe the tax credits are doing their job and we will do everything we can to keep that positive momentum going,” Rivinius said.
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