Recovery Taking Hold in New-Home Market?
Daily Real Estate News | Friday, November 18, 2011
Single-family housing starts rose 3.9 percent in October with permits, a gauge for future home building, also seeing a sizable jump, the U.S. Commerce Department reports. Housing permits on single-family homes rose 5.1 percent in October to 434,000 units—its highest level since December 2010.
“While we still have a long way to go toward a recovery, some signs of hope are emerging in certain markets where economic and job growth is occurring and where foreclosures have not been an overwhelming obstacle,” Bob Nielsen, chairman of the National Association of Home Builders, said in a statement.
Single-family housing starts rose to an annual rate of 430,000 units in October. However, after a very large “unsustainable” gain last month, multifamily starts saw an 8.3 percent decline in October.
Housing starts in October by region, as reported by the Commerce Department:
- Northeast: +17.2%
- Midwest: +9.7%
- South: +1.6%
- West: -16.5%
The future is looking brighter for home builders. Housing permits for both single-family homes and multifamily rose 10.9 percent in October. For single-family homes alone, permits rose 5.1 percent, and for multifamily permits they jumped 24.4 percent—its highest level since October of 2008.
“The three-month moving averages for both housing production and permitting activity have been gradually rising since this spring, which is consistent with our forecast for slow improvement in market conditions through the end of this year and a positive sign that a more solid recovery will begin to take hold in 2012,” NAHB Chief Economist David Crowe said in a statement. “That said, the improvements we are seeing are still limited to scattered local markets where economies are improving, and obstacles such as tight credit conditions for builders and buyers, appraisal issues stemming from new homes being compared to distressed properties, and consumer concerns about job security are definitely slowing the progression of both a housing and economic recovery.”