Special offer

Home Building at Four-Year High and other Signs of a Housing Recovery

By
Real Estate Agent with Real Estate Buy Sell Invest www.SanDiegoHomeSold.com

Home Building at Four-Year High and other Signs of a Housing Recovery

Written by Samuel Scott Financial Group on December 17, 2012

The rate of new home building increased to its highest level in more than four years during October, according to a Census Bureau report issued Tuesday. The Census Bureau report showed builders started construction at an annual pace of 894,000 homes last month, a 3.6% from the pace in September. ”The further rise in housing starts in October confirms that the previous month’s very strong gain was not an unsustainable surge,” said Paul Diggle in an interview with CNN Money, real estate economist with Capital Economics. “It’s clear that the homebuilding recovery is gathering a real head of steam.”

 

The stronger-than-expected report came because of a surge in construction of buildings with five or more residences in them (10% increase from prior month). Single-family home starts remained little changed from September (down -0.2%). But the September and October readings were the two best months for single-family home starts since 2008 as well.

 

Applications for building permits slipped 2.7% to an annual pace of 866,000. Despite that decline, the October reading was stronger than any month other than September over the course of the last four years. Housing starts have soared about 42% from year-earlier levels, while permits are up about 30%.

 

Joseph LaVorgna, chief U.S. economist for Deutsche Bank, remarked to CNN Money that the recovery in housing is coming at a critical time for the overall U.S. economy, as the lift it was getting from exports and capital spending by businesses had started to slow.

 

The housing market has been showing numerous other signs of recovery in recent months. Demand for homes have been helped by mortgage rates at record lows.The Federal Reserve’s decision to buy $40 billion in mortgages every month as part of QE3, is likely to keep rates low for the foreseeable future. The low mortgage rates, coupled with affordable housing prices and an improving jobs market have helped to restart home sales.

 

Foreclosures have fallen to a five-year low, reducing the supply of distressed homes available on the market. Four years of depressed levels of home building has reduced the supply of new homes on the market to nearly record lows, according to a separate government report.

 

Shared by Gary Giffin www.SanDiegoHomeSold.com 

Comments (0)