WASHINGTON — The Obama administration’s effort to help those at risk of losing their homes is failing to aid many and could spur a rise in foreclosures that would further depress the housing industry.
More foreclosures would force down home prices, and that would deter already-ailing homebuilders from starting new projects.
As a result, the economic rebound could suffer. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.
“Foreclosures hold down the pricing for everybody,” said Marty Mitchell, vice chief executive of Mitchell & Best Home Builders in Rockville, Md. “As a builder, we have to be cognizant of foreclosures, if there are more coming along, because it affects pricing across the board.”
Homebuilding plunged in June to the lowest level since October, the Commerce Department said Tuesday. Driving the decline was a more than 20 percent drop in condominium and apartment construction, a small but volatile portion of the market.
Construction of single-family homes, the largest part of the market, was flat.
Applications for building permits, a sign of future activity, were up slightly. But that was also the result of the volatile apartment market.
