Home Construction Figures Continue to Rise
published on October 19, 2012
September saw the fastest rate of new, single-family home construction nationally since July 2008, and this spike indicates the housing recovery is strengthening across the country. The Commerce Department reported that builders broke ground at a seasonally adjusted annual rate of 872,000 units in September. That’s an increase of 15% from August, and applications for building permits, a sign of future construction, jumped nearly 12% to a seasonally adjusted annual rate of 894,000, also the highest since July 2008.
Sales of new and previously owned homes have been steadily improving this year, and home prices are starting to show consistent gains in markets across the U.S. Record-low mortgage rates have encouraged more people to buy, and the Federal Reserve’s aggressive policies could push long-term interest rates even lower, making home-buying affordable for the foreseeable future.
Though new homes represent less than 20% of housing sales, they “have a very positive impact on the economy,” Austin REALTOR Brian Talley said. “Every home that gets built creates an average of three jobs for a year and can generate around $90,000 in tax revenue, depending on the state.”
A pickup in sales stoked by record-low mortgage rates, population growth, and a dwindling home supply indicates construction can continue strengthening, contributing more to economic growth. Austin isn’t the only city seeing its population swell in growing neighborhoods like Steiner Ranch and Avery Ranch; the number of households in the U.S. grew 2% in 2011, the biggest gain in 10 years, to 119.9 million, according to the most recent Census Bureau data. As a result, the supply of new homes available for purchase has diminished. There were enough properties on the market nationally in August to last 4.5 months at the current sales pace, matching July as the lowest level in almost seven years, Commerce Department figures show.
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