PCA says builders may not increase activity in 2010

Some builders may hold back on constructing homes this year.
Some builders may hold back on constructing homes this year.
A recent report from a cement organization indicates that those who use construction equipment to build homes may not increase their activity in 2010.

According to the Illinois-based Portland Cement Association, builders will probably not increase construction unless inventories of unsold new homes are reduced and home prices either stabilize or increase.

"Currently, with housing prices fluctuating and new foreclosures coming on the market every month, homebuilders have no guarantee of an adequate return on investment," said Ed Sullivan, chief economist for the PCA, adding that these conditions probably wouldn't change in the coming months.

PCA said it expects "tepid increases" in construction of residential properties in the second half of this year, while larger gains are expected in 2011 and later. The organization also predicts that housing starts will increase 14.4 percent in 2010.

A recent report from the U.S. Census Bureau and the Department of Housing and Urban Development noted that though housing starts dropped in December, the number of building permits did increase, which could mean there will be an uptick in building in the coming months.