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Housing Starts Post Big Gains in September
WASHINGTON -- Nationwide production and permitting of new houses rose sharply in September, reaching their highest levels in more than four years. And, sparked by rising home prices across much of the nation, the housing recovery seems to be under way.
A 15% gain brought the pace of new housing construction to a seasonally adjusted annual rate of 872,000 units, while an 11.6% gain brought the pace of permit issuance to 894,000 units. These were the strongest numbers seen in both categories since July 2008, according to a report from the National Association of Home Builders.
“Builders are responding to the rising demand for new homes as consumers begin to feel more confident about their local markets and put back into motion purchasing plans that were on hold during the recession,” said Barry Rutenberg, NAHB chairman and a home builder from Gainesville, Fla. “Yet, while September’s surge in activity is certainly encouraging, we need to remember that we still have a long way to go back to a fully functioning market -- and to get there, significant challenges must still be addressed in terms of credit availability and appraisal issues as well as the increasing cost of building homes due to rising materials prices and a declining inventory of buildable lots.”
Added NAHB chief economist David Crowe, “Today’s strong report corresponds with the significant gains we’ve seen in builder confidence over the past year, and confirms our view that a housing recovery is solidly under way in a growing number of markets nationwide. That said, we are now almost at the half-way mark in what would be considered a normal amount of new-home construction in a healthy economy, and we need to see consistent improvement like this over an extended period to get back to where the market should be.”
The overall gain in new-home construction in September was reflected across both the single- and multifamily sectors, the first posting an 11% gain to a rate of 603,000 units -- the best since August 2008 -- and the second posting a 25.1% gain to 269,000 units – the best since September 2008.
Combined single- and multifamily starts rose in all but one region of the country in September. The Midwest saw with a 6.7% gain, the South a 19.9% gain and the West a 20.1% gain. Only the Northeast posted a decline, 5.1%.
Published by The Business Journal, Youngstown, Ohio.