Here is a very interesting article recently published in The State Newspaper, written by Steven Mungo, CEO of Mungo new homes. I have sold a few Mungo homes recently (Harbor Homes are a part of this company) so I am personally interested in what Steven Mungo has to say about housing and the economy.
"Economists are in virtual agreement on two points: that job
growth is essential to restore the nationâ€™s economic health and that
there can be no economic recovery without a housing recovery.
from S.C. government agencies and non-profit associations bear this out
in stark terms and reveal a direct correlation between todayâ€™s anemic
economic recovery and the struggling housing sector.
marketâ€™s peak in 2005, the state produced more than 43,300 new
single-family homes. In 2011, just more than 13,000 homes were built.
This translates into $4.75 billion in lost wages, a reduction of more
than $1 billion for local and state tax coffers and the elimination of
more than 86,375 jobs.
In the Columbia market, the peak-to-trough drop-off is equally
disturbing. More than 4,200 fewer homes were built in the metro area in
2011 than in 2005, resulting in nearly $500 million in lost wages, $41.5
million less in local tax revenues and 12,000 workers idled.
from new home construction has a wide ripple effect. While about half
of these job losses were in the residential-construction sector, the
other half were spread over other industries, including manufacturing,
transportation, wholesale and retail trade and finance and insurance.
our cash-strapped state and local governments struggling to maintain
essential services and avoid further job cuts, stabilizing the housing
market will mean more jobs and more money in our communities. Home
building is essential to increase the property-tax base that supports
our local schools, police departments, firefighters and road repairs.
the inventory of unsold new homes at historic lows and scattered
housing markets in South Carolina and around the country beginning to
show signs of life, builders should be gearing up to meet demand, create
new jobs and move the economy forward.
credit standards are harming home buyers and home builders alike by
keeping many credit-worthy borrowers out of the market and preventing
profitable new housing projects from getting started.
economic times, housing accounts for more than 17 percent of the
nationâ€™s economic output. So when lenders are unwilling to provide the
credit needed to renew the production process, everyone suffers. Workers
get laid off, sound projects go uncompleted, home sales fall through
the cracks, and economic growth is stifled.
At a time when the
federal government needs to be promoting pro-growth housing policies
that will put Americans back to work, strengthen communities and boost
Americaâ€™s long-term economic prospects, Washington policymakers are
threatening to eliminate our nationâ€™s long-standing commitment to
In short, homeownership is under attack. Anti-housing
proposals circulating in Washington â€” including eliminating or weakening
the mortgage interest deduction, instituting a 20 percent down payment
standard on home mortgages, and getting rid of Fannie Mae and Freddie
Mac â€” would have the effect of keeping homeownership out of reach for
millions of middle-class Americans for years to come.
Dream of homeownership builds stronger communities, provides a solid
foundation for family and personal achievement and improves the quality
of life for millions of people. It is truly the cornerstone of the
American way of life.
If you believe that homeownership is a value
worth fighting for, I invite you to make your voice heard and join
other concerned citizens by attending a Rally for Homeownership at 1
p.m. on Thursday, Jan. 12, at the State House. Gov. Nikki Haley and
other local, state and federal officials and business leaders will
discuss why homeownership and home building are critical to a strong
economy and must be a priority for local, state and national
Mr. Mungo is CEO of
Mungo Homes and served as the 2010 president of the Home Builders
Association of South Carolina. Contact him at email@example.com."