Housing Construction Accelerates

Housing starts and housing permits for September showed a surprisingly strong growth. Overall starts increased 15% to an annualized rate of 872,000, the highest since July 2008. The increase was nearly universal with single-family starts increasing 11% to 603,000, the highest since August 2008, and multifamily increasing 25% to 269,000, the highest since September 2008. Three census regions also saw increase with only the Northeast reporting a decline of 5%.

 
Permits for both single- and multifamily homes were up 6.7% and 20.3% respectively, both best since July 2008. Permits were up in all regions for overall building types and for single-family homes. The number of single-family completions at 524,000 was the highest since the rush to respond to the home buyer tax credit in early 2010.

 
The extra building surge in September confirms the steady build-up in builder confidence that has increased for six consecutive months. Builders have been saying that the potential home buyers they see now are more serious about buying, which has increased builders confidence enough to start additional homes. Builder inventory of new homes for sale is at an all-time low so some replenishment of inventory is necessary if new homes are to remain competitive against the existing housing stock. Credit availability for home builders has been a significant constraint against building inventory, but some modest relaxation may have helped this situation.

 
Even with the strong September report from Census and HUD, total housing construction remains at less than half a normal market output as many consumers remain on the sidelines or have insufficient credit or income to make that leap. As consumer confidence rises and jobs return, more local markets and more consumers will join the buyer market and I expect housing construction to continue a modest but fairly steady rise throughout 2013 and into 2014.

9 Responses to Housing Construction Accelerates

  1. […] Read the entire article from the NAHB Housing Construction Accelerates […]

  2. […] October reading of the HMI, September housing starts and permits registered large gains. Overall starts increased 15% to an annualized rate of 872,000, the highest since July 2008. Single-family starts increased 11% to […]

  3. I am not really surprise to here about it and congratulation about it,in Finland country country single family house is one of the top choice of all people and if i am not mistaken sale for it is also increase up to 15% which is really nice to market.Glad you share the good news for single family house.

  4. […] October reading of the HMI, September housing starts and permits registered large gains. Overall starts increased 15% to an annualized rate of 872,000, the highest since July 2008. Single-family starts increased 11% to […]

  5. […] more than 50% since hitting rock bottom during the second quarter of 2009. Data sources such as housing starts and NAHB’s own HMI continue to offer evidence that construction of new single-family homes is on […]

  6. […] September data from the Job Openings and Labor Turnover Survey (JOLTS) indicate construction hiring picked up in September after a slow August. However, an increase in layoffs held back net hiring for the month. As a result, the pace of hiring for the sector in 2012 remains lackluster, especially given the recent pickup in strength of housing construction activity. […]

  7. […] September data from the Job Openings and Labor Turnover Survey(JOLTS) indicate construction hiring picked up in September after a slow August. However, an increase in layoffs held back net hiring for the month. As a result, the pace of hiring for the sector in 2012 remains lackluster, especially given the recent pickup in strength of housing construction activity. […]

  8. […] sector within the overall economy. After reaching a low, many housing market indicators including starts, sales, and prices now indicate that the housing market is beginning to recover. However, the […]

  9. […] sector within the overall economy. After reaching a low, many housing market indicators including starts, sales, and prices now indicate that the housing market is beginning to recover. However, the […]

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