Reaching their highest level since September 2008, building permits, which are a gauge of future construction, rose 4.5 percent to a seasonally adjusted annual rate of 747,000. This increase in permits is a good indicator for broader economic activity and hopefully one that will lead to an increase in new home construction in the months ahead.
As builders request permits for future projects many feel that this is a sign that the housing market could very well improve over the course of the coming year.
For the last several months home builders have been growing more confident in the housing market after noting that more and more people are expressing an increased interest in buying a home.
Supporting the builders' optimism, this past January and February sales of previously occupied homes hit a five year high, while more jobs were created and unemployment dropped from 9.1 percent in August to 8.2 percent last month.
Even though new homes represent only 20 percent of the overall housing market, each new home that's built creates, on average, three jobs for a year and generates nearly $100,000 in taxes.