According to an article in the Dallas Morning News, the Commerce Department reported that new home construction declined by 15.5 percent, a record low. As of December 2008 annual new home construction fell to 550,000, the lowest record since new home construction began being recorded in 1959.
On the surface this may look like a bad event--less new home construction means less jobs, less money being borrowed and spent. But if you look at it in the wide scheme of things, it's good news for those facing foreclosure and/or declining home values. With the amount of new home construction decreasing there will be less housing supply on the market. With less housing supply on the market, existing homes will have an opportunity to actually be sold without the need to "compete" with the sales of new homes.
It's also good news (in the long run) for those facing foreclosure who want to sell their home. They also will face less competition if the supply of new housing on the market in reduced. Of course on the other hand, our economy has heavily depended on the job growth of the housing industry, so we may actually see an increase in foreclosures from those Americans who depend on the housing industry to make a living. It's really a catch-22, at this point we don't really "need" more new housing; but if we don't produce more new housing we can't sustain all of the jobs that were created by the housing industry which fueled the huge economic expansion we've experienced in the past ten years.