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It was the largest jump in three months, as new home construction increased by 17.2% during the last month.The increase was much higher than analysts had been expecting, and last month we moved up to an annual rate of 532,000 units... well above the 500,000 units that had been forecast.
Any good news is great to see come out of the ailing housing market, and today we got more than just the good news on new home construction. In addition to the construction data, also get news of a nice bounce in applications for building permits.
We pay attention to building permits because they are an indication of future real estate activity, and in May there was a 4% increase in this area as well.
Have we finally started to see a rebound in the housing market? There have been some encouraging signs lately, but there are still plenty of reasons to expect further weakness.
There are still a huge number of homes for sale out there. The market is flooded with people looking to get out of their homes, and the demand is just not there. Right now most people are thinking about foreclosures, unemployment, and the failing auto industry. It is going to take a while before Americans get too excited about purchasing a new home. All of this continues to keep prices low, and the question is: how low will they go before people start coming back into the market?
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Reader Comments (Page 1 of 1)
6-17-2009 @ 5:28AM
al coholic said...
While a seventeen percent increase sounds good, there would have to be a 100% increase just to get back to the level of housing starts we had in the late seventies. A time when there were 50 million fewer people in ther US.
I don't hear anyone bragging about any improvements in commercial starts. Want to guess why? Projects have been cancelled at an alarming rate all over the country.
The impending commercial real estate crash will be worse than anytning we have experienced since the Great Depression. It's going to take a lot of "Obama" bucks to stem that coming tide.
Better tell your kids to start saving now because they will be bearing the burden from this a few years down the road.