According to a Reuters survey, new construction of homes in the United States and permits for future buildings are on the rise. The actual numbers are supposed to come out today.

Chief economist Chris Low from the FTN Financial group in New York said, “New home sales have improved in recent months and new home inventories are likely to fall to a 27 year low in September, but there are still about twice as many existing homes on the market as there were the last time sales were this weak, suggesting it is still a very difficult environment for homebuilders.”

Luckily, the housing market may actually be showing signs of getting better. The housing market is the worst that it has been since the 1930′s and the slump actually began in 2006 but didn’t become widespread for a few years.

“We forecast residential investment will add to growth in the third quarter, the first positive contribution since the fourth quarter of 2005, and contribute an average of 0.8 percentage points to quarterly growth next year,” said Michelle Meyer, an economist at Barclays Capital in New York.

“As for home prices, we believe the freefall has decidedly ended but that it is too early to call the bottom. Moreover, foreclosures are likely to flow into the market at an accelerating pace, weighing on prices.”

Like the cash for clunkers program, there is a government incentive for new home buyers right now. There is an $8,000 government tax credit for those buying their first home that is set to expire next month. There are also expected to be more foreclosures on the market throughout the end of the year. When there are more foreclosures on the market, new homes won’t sell because many buyers find foreclosures can be too good of a deal to pass up.

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Whenever you look at the overall economy and get discouraged, remember that there are a few upsides to the economy being in the gutter.

First, as a while, we’re borrowing less and putting away more. I suppose that we’ve all been a bit burned by not living within our means. As the credit crunch collapsed the world of the credit markets, people began to actually save more money. Yes, there are still plenty of people out there that are having a hard time getting monthly bills paid due to the high credit card payments they have incurred, but overall savings are up for everyone.

Even with gas prices down, we are actually driving less. When gas prices hit record highs last summer, people took notice and curbed their driving habits. Some of it actually stuck and now that gas prices are just over half what they were a year ago, the roads are still a bit emptier and people are carpooling and finding other ways to get from place to place.

Consumers are actually wasting less when it comes to necessities. Everyone is squeezing the last bit of shampoo out of the bottle and wearing shoes that they would have likely thrown away a long time ago. Consumers are shopping at thrift stores more to save money too; so they’re also using up what someone else didn’t. Thrift stores like Goodwill or the Salvation Army are actually running out of items faster than items are donated.

Out of the new home construction, smaller homes are being built. This goes back to wasting less. With smaller homes, we use less electricity and other resources. We’re saving money with smaller homes and leaving a smaller footprint on the earth. The average size for a new home that was being constructed has decreased for the first time in 10 years by 11 percent or nearly 300 square feet. Smaller houses also means that we’re using less resources to actually build the houses; there is less wood, wiring, and piping.

Finally, people are actually eating healthier. Red meat sales are down while the sales of poultry, fruits, and vegetables are up. Consumers are shopping more at local farmers’ markets, where produce is not only fresher, but is also typically cheaper than stores like Wal-Mart. This is also a great way for local businesses to start picking up. When people purchase more at farmers’ markets, they are putting the money back into the local economy.

To help with the decrease in profits, Lowe’s will be opening fewer stores in 2009.

From the AP:

The nation’s second largest home improvement chain said consumers continued to shy away from big-ticket items such as new flooring, appliances and cabinetry, particularly as they try to shore up their savings and find it more difficult to tap into home equity lines of credit.

Sales of discretionary categories — particularly for items such as home organization, plumbing, lighting, and windows and walls categories — fell to decade lows.

More than 2 million households received foreclosure filings last year and some economists estimate as many as one in four homeowners owe more money on their mortgages than their properties are worth. President Barack Obama has proposed a $75 billion plan to curb foreclosures and ease the housing slump that helped ignite the recession.

“Anytime you can put the consumer in better financial shape, by having more disposable income in their pockets, lessening their debt burden … all those things help,” Lowe’s Chairman and Chief Executive Robert Niblock said Friday. “Is what you’re seeing going to be enough to cause a dramatic turnaround in the environment? No, we don’t think so. It just makes the environment less bad.”

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Even though those on Wall Street were expecting new home constructions to be closer to 950,000 this year, perhaps the slow down in home construction means the 11 month surplus of homes can diminish and some of the housing problems can be fixed.

It honestly seems more like a good thing than a bad one in this case. However, I believe that people won’t be buying a lot of the homes already on the market because it’s just getting too hard for people without perfect credit to get a home loan. Well…maybe that’s not an awful thing either.