New housing starts were on the rise for the month of August according to HUD and the U.S. Census Bureau. This 2.3 percent rise was prompted by gains seen in the single-family sector.
The National Association of Home Builders (NAHB) reports that "the pace of new construction rose in every region for a combined 5.5 percent gain to 535,000 units." This is fastest seasonally adjusted rate in more than two years.
Overall regional figures were mixed, however. The Midwest led the way with a staggering 20.7 percent gain in combined starts. The South had a 3.7 percent gain. The Northeast and West saw combined starts decline by 12.6 and 4.3 percent, respectively.
"Builders across the country have been reporting noticeable improvement in the number of serious buyers who are in the market for a new home, and today's report shows that this is translating to some welcome gains in construction activity," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.
He continued that "while there is still plenty of room for improvement, it's encouraging to see this continuing trend that is spurring much-needed job growth." For every 100 new single-family homes that are built, 300 new jobs are created, he noted.
"The pace of overall housing production has been edging gradually upward all year as consumers become more confident in their local housing markets, and the latest data are further evidence that the housing recovery is here to stay," added NAHB Chief Economist David Crowe. "That said, the pace of this recovery continues to be constrained by various hurdles, including a tough lending environment, inaccurate appraisals and more recently, rising prices on key building materials."
Builders continue to be cautious, however, with the issuance of new building permits falling 1.0 percent for the month of August to 803,000 units. Single-family percents was pretty much unchanged, while multifamily permits fell by 3.0 percent.
Sales had better news this week, with existing-home sales rising for the sixth straight month, according to the National Association of Realtors.
Lawrence Yun, NAR chief economist, said favorable buying conditions get the credit. "The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions," he said. "Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices."
Total existing-home sales rose by 7.8 percent in August to a rate of 4.82 million homes. This is 9.3 percent higher than August of 2011.
"The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years," Yun added.
How has this continued rise in home sales affect price? The national median home price continues to rise, now up 9.5 percent from a year ago. It now is reported at $187,400.
Published: October 1, 2012
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