Everyone would like to have a place that they can call their home. If you have saved enough money, you might even consider building your own instead of renting. But there is one problem, the country is now in a financial crisis. So should you still continue building one now or continue paying rent?

The answer is yes as long as you have the money in your possession. This means you don’t have to borrow money from the bank to buy the materials and pay for the people who will be doing the work.

To do that, you have to first figure out what kind of home do you want to have and set a certain budget. After getting an estimate as to how much materials and labor will cost, you also have to factor in inflation and a little allowance just in case there will be some unexpected situations later on. With all the information, you can have your contractor work on your property until it is complete.

Over time, the value of your house will go up and when you decide to sell it, you will have more money which you can use to buy or build a bigger home.

That may not be the case right now when we are presently facing a financial crisis but it will happen. One thing that could help increase its value even is to install eco-friendly mirrors or put a security system in place.

This will never happen if you continue to pay rent because you are just shelling out money and giving this to the landlord so you don’t earn any interest.

But wouldn’t it be cheaper to buy a home especially when the market value went down due to the financial crisis?

While it is true there is a sharp decline in the housing market, you have to remember that it is not brand new so you will have to conduct some repairs and maybe even renovate certain portions of the house. If the house is old, you will also have to spend a lot to make sure the temperature can be regulated during the hot and cold months throughout the year.

There are a lot of lessons you will learn when you decide to have your home built. You will learn that it is not just about hammering a nail into a piece of wood but also properly budgeting as well as managing how much cash you have so you don’t overspend thus not wasting any of your hard earned money.

In fact, when you make a home, you don’t only establish a place for yourself but also help people in the construction industry and the state. This is because you guarantee work for those who do this as a living and the money you pay for building permits adds to the local revenue.

So should you build your home amidst the decline in the home building industry? Yes because you will finally have your dream home just the way you like it with everything there that is brand new. If there is a problem, it cane easily be fixed with any additional because it comes with a warranty. It is also environment friendly or “greener” as it is up to standard with the latest environmental regulations.

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The construction industry took a beating due to the financial crisis. Just how bad did home building decline? It depends where you look but overall, the numbers are very frightening.

In a report released recently, new order for homes built in the third quarter of 2008 was down 25% compared to last year. In numbers, that is 2,002 homes for this year compared to 2,660 homes in 2007.

Because of what is happening in the economy, there was increase in the number of cancellations from 24% last year to 27% this year. While real estate companies tried to curb the trend by offering it to other potential buyers, the market wasn’t biting which is why there were a lot of homes that were never sold.

In terms of home building revenues, that roughly translates to $928 million. If you think that is still good, look back at the sales performance last year and you will see that it was lower by 27%. These figures go on and on and they are really depressing.

So are companies making money? No and the worse part is that construction companies have to layoff hundreds or even thousands of workers in order to stay afloat.

If you wanted to build a home, the only way you can do that is if you have extra money flowing around right now because most banks will not able to loan that amount to you right now.

At this rate, the construction industry will only be able to produce 817,000 new homes this year compared to 1.98 million units in 2006. That is a lot and it is note expected to improve any time soon.

But are these numbers surprising? The answer is also no because it is the right reaction especially when the country is in a financial crisis.

Analysts believe this will change in the next 2 to 3 years because within this time frame, homes that were unoccupied will now have people living in them and only then will home building be once again on the upward trend.

What everyone is hoping for right now is a miracle because we are not yet out of the woods when we talk about the current financial crisis. Yes, a $700 billion bailout plan was approved and signed into law but just like Bernanke said, no one expects the recession to end overnight. It is going to take time.

Is the home building decline also happening elsewhere? In the case of Canada, the answer is no. In fact, the opposite is happening. If you were to compare the number of houses built for the month ending September this year versus last year, 6,000 more homes were built in 2008 compared to 2007.

There are many reasons for this such like more people want to settle down so they move away from the rest of their family and most importantly the program they have in place happens to be much better across the border compared to what is available in the US.

But back to reality, no one can deny that over here, there is a sharp decline in home building. The only thing anyone can do is hope for the best in the months and years ahead so we can maybe forget that this ever happened.

The financial crisis is affecting everyone. People are losing their jobs and some have to foreclose their homes. As a result, there is a decline in home building making some doubt that now is now the right time to build a home.

But what if there was no financial crisis? What if you can borrow money from the bank? What if you have the cash on hand? If there were no problems, then yes why not build your dream home.

To help you along, this is what you have to do.

First, get in touch with the local builders that have constructed houses similar to the size, quality and features that you want. By talking to them, you get a straight answer as to how much it is going to cost for the entire project plus what materials they will use.

Since its been months or even a few years that these homes were built, you have to expect that it is going to cost more now to construct something similar. The rooms which will be the most expensive to make will be the bathroom and kitchen. The number of windows and their size is another factor as well as the vaulted ceilings and high roof pitches.

You will also have to include inflation because building a home increase from 3% to 6% annually. With this information, only look at homes that were built within the last 6 months.

Don’t forget to put a 10% additional allowance to your budget when you make your estimate because plans change and in most cases, you and you contract will encounter unforeseen circumstances. Naturally you have to deal with the situation otherwise there will be delays when everything will be finished.

Believe it not, the cost per square foot is higher for a small home than a big one. Why? Because the cost of items is spread over and a two story home if that is what you want has a smaller roof and foundation. The same goes for plumbing and ventilation.

Another thing that could reduce cost is the shape of the home. Houses that are shaped like a rectangle, square or dome shaped are more affordable to build since there are not that many angles or corners which increases the amount of labor and the materials that will be needed.

It will be much easier to select the final blueprints, which is the basis of the project once you have estimated the construction expenses.

As much as possible, work with even numbers because this reduces wasted materials. The ideal home to make should be not less than 32 feet deep otherwise your roof trusses will have to be custom made which will cost more.

If you had this property for a long time, then chances are the neighborhood around you is already well developed. You don’t have to haul a lot of dirt, do grading, clear trees or blast through large rocks if your property happens to be somewhat secluded.

No one in his right mind will construct a house when there is a decline in home building due to the financial crisis. You just have to keep these tips in mind when the economy does improve so you will already have an idea how much money you need to build it.

Has home building declined in recent years? The answer to that question is yes. In fact, is has reached its lowest rate in 17 years.

What this means is that the number of homes or apartments being built will be the fewest since the Second World War. The reason for this is simple, not that many people are willing to build a home and banks are a bit hesitant whether or not to approve a loan.

In some states, there was a decline of more than 20 percent for new housing permits. This means contracts don’t have that many jobs and there is not that much money collected from real estate taxes and building permits which contribute to local revenue.

A good example is the state of California which lost more than 220,000 jobs in the past 2 years. This translates to a loss of about $30 billion to the state’s economy. Some companies have gone bankrupt with others forced to close down their projects.

So what should people do now? Well a lot of experts advise consumers to tighten their belts and then wait till the smoke clears before they consider building a new home. If you have the money, you could buy a homes sine many are up for sale especially when a lot of them are foreclosed and now owned by the bank. If you don’t have a lot of cash, make sure you save enough money to save it from being foreclosed.

Since the property of most homes has also gone down, many of the current homeowners can’t even make a profit if they decide to sell it now in hopes of building a new one.

For those who are renting, continue paying for it because it is cheaper to own until maybe you have save enough to consider building your own home. In most places, annual rent is still less than 3% of the acquire price and mortgage rates are 6.5% which makes it cost more than double to try and borrow money to build a home.

Analysts believe that the decline in home building may be dramatic but it is as bad as you think because it is simply a market reaction to recent building which went way ahead of new household formation. What this simply means is that more houses were built than people could actually buy. The question on everyone’s mind now is how long before things are on the up trend.

Many people that it will take between two to three years for the market to stabilize so business will be back to normal by 2011. So again, if you have the money, there is a lot of houses that are now available in the market to buy and when these are sold, equilibrium is achieved and there will be a construction boom once again.

There is no doubt that the current financial crisis is the cause of the decline in home building. The good news is that things will change for the better in less than 5 years so in the mean time, those who are paying for a home should sit tight until the bailout and any other remedy the government is trying works. As for those who are renting, be patient because now is not the right time to consider building a home.

Workers are laid off while some construction companies go bankrupt are two things that happen when there is a decline in home building. But if you think that they are the only ones affected, think again because it creates a domino effect.

Aside from those working in the construction company, those who supply the construction materials like the lumber yards and steel mills are also affected because they will not be able to sell that much compared to the last month or even last year which is why they could pose little or no growth at all when it is time to report their corporate earnings.

On a national level, there has been an increase in the number of people who are unemployed which happens to be its highest in 7 years. Just last month, 159,000 people lost their jobs and 22% of them came from the construction industry.

Naturally, such massive job losses will affect consumer spending since people will tighten their belts even further rather than buying something they like from the store.

If a house is going to be built, the homeowner is required to get a permit. This will give him the right to build on the property and is also used by the government an indicator of future building activity. If there is a decline, cities that issue these permits will also lose a certain amount of revenue thus they will not earn that much from construction as they have done so in the past for projects that they plan.

Just to show you how bleak it is, overall permits for the month of September this year in the Midwest, South and West declined by 9.8 percent, 9.9 percent and 12.7 percent, respectively.

The only one who did well was the Northeast after a recent code change in New York City but that just offset the losses it experienced in the two previous months.

These figures are important because housing does contribute to the GDP or gross domestic product of the country and since there is a slump right now, it is only natural that it has a negative effect on the economy.

But what is surprising is the fact that the decline in home building as well as the sale or resale or homes for the first time contributed to the US recession. Back in 2000 to 2001, this was blamed on the burst of the dot-com bubble or the attacks of 9/11.

Although we recovered from that and experienced growth over the 7 year period, some say that this is normal because the recession is part of the business cycle. The economy expands, slows down and then recovers. Yes people will lose jobs and some businesses will go bankrupt.

Should only the strong survive during these trying times? No because the country has experience a recession countless times and some feel that we didn’t learn our lessons from the past which is why we are here again.

Have we learned from our mistakes? Even if the $700 billion bailout plan works, some say no because it is bound to happen again unless radical changes in the system are done. The same goes for the decline in home building because maybe we should have only made homes equal to the demand but that in reality is hard to accomplish.