U.S. housing started to turn the page in early 2012 and never looked back. The data coming from the real estate market fluctuates from month to month but the trend is pointing up and there is no sign of reversing course anytime soon.
From the months of February to March, housing starts in the U.S. have increased to 7% and hit a record high of 46.7% since last year, said the U.S. Census Bureau last Tuesday.
Last month's starts rose to a yearly rate of 1.03 million units from 968,000 in February – a figure above 706,000 in last year's record. This is a number we haven’t seen since June 2008. These gains signal continued improvements for the housing recovery in the U.S. that everybody was waiting for a few years.
In March, however, the rate of single-family starts declined 4.8% to 619,000 units from 650,000 as of February.
There is also a significant drop in building permits, reaching 3.9% from February to March and accounted for only 902,000 permits filed the previous month. The present number of units can be compared to February data and is 17.3% better than the 769,000 permits filed in March 2012.
Home completions achieved fairer results with 800,000 more units in March from 721,000 in February. March had 11% more completions and was significantly a lot healthier with 36.3% more progress.
Quicken Loans Chief Economist Bob Walters lauded the 7% rise in new home construction in March as one of the highest in almost five years.
He added that there have been pent up demands and it is now becoming an engine of growth in the house construction department, contributing to the rise of housing starts which grew at a rate of 7% last March. Everyone wants a piece of their dream home, but due to the inadequacy of current inventory, consumers resort to construction. This, said Walters, is a sign of a strengthening economy and one proof of that is last week's sudden increase in mortgage applications and home prices.
The construction of multi-unit apartments, which usually fluctuate more than the single family homes on a monthly basis, was also very strong and encouraging. It jumped almost 31 percent to an annual rate of 417,000 units, which we have not seen since the early 2006.
The housing recovery in the U.S. will encourage consumers to spend more money, which will spur additional percentage point of economic growth. More home building and sales mean more sales at furniture and home improvement stores.
Home builders who have been very passive in recent years are now concerned about the limited land and rising cost of building materials and labor. However, despite these concerns, home builders still project climbing sales figures over the next six months. This is good news for the economy because they will keep funding new housing projects across the country, which in turn will employ millions of construction workers. Large home building companies are now engaged in a dialog with the city managers over future sites where they can build new homes.