MUFREESBORO, Tenn. (WMOT) -- A new report by Mid-State economists suggests the recovery of new home construction has stalled in Tennessee.
Economists with the Center for Business and Economic Research at Middle Tennessee State University says single family home construction permits began trending higher in the second half of 2011, but stalled out again early this year.
Steve Jensen, president of the Rutherford County Builders Association, concedes recovery is a long way off, but says his members are starting to see some light at the end of the recession tunnel.
“The market is trying to come back…the home building industry in Rutherford County is trying to come back. There seems to be a fair amount of movement in the lower end of the market. Starter homes seem to be going well. But we still have some major obstacles to overcome.”
Among those obstacles Jensen lists is inflation. Contractors are being squeezed by the slow but steady rise in building costs. He also notes that the recession drove many tradesmen out of the business, making it hard to find qualified workers.
Most importantly, Jensen says prospective customers are having a hard time getting construction loans. He says the glut of distressed homes is driving down appraisal values.