New Home Construction
Indicators used to gauge the incline or decline of construction, new-homes and building permits, surged last month. Builders started more home projects in November increasing above October 9.3%. The last time levels were this high was in April of 2010.
While home construction rates are seasonally adjusted at an annual rate of 685,000 homes, this rate is still below the 1.2 million home pace economists consider being ‘healthy’ for the new-home sector.
Multi-family homes carried the bulk of the increase with a jump of 25.3%, single family homes rose 2.3%, and building permits 5.7%.
“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving."
Source: “Apartment Construction Spurs 9.3% Jump in Housing Starts, But Level Remains Low,” Associated Press (Dec. 20, 2011); “U.S. Nov. Housing Starts +9.3% to 685K; Consensus +0.3%,” Dow Jones International News (Dec. 20, 2011); and National Association of Home Builders