Home builders say they’re more confident about the housing market – and it shows! Learn more about the latest increase in construction activity.
New home construction surged 15 percent in the month of September, following a 4 percent increase in August, according to the latest federal data, which indicates a continued recovery in housing market.
New home construction took place at a seasonally adjusted annual rate of 872,000 units in September, up from 758,000 for August, and nearly 35 percent higher than the September 2011 rate of 647,000, according to the report released jointly today by the U.S. Census Bureau and Department of Housing and Urban Development.
The number of new building permits, a forward-looking indicator for the housing market, rose nearly 12 percent from August to September to a seasonally adjusted annual rate of 894,000, according to today’s report. The rate is more than 45 percent higher than the September 2011 estimated of 616,000.
The “surprisingly strong growth” in building activity reaches levels not seen since 2008, notes the Eye on Housing blog published by the National Association of Homebuilders, or NAHB, but total construction output remains at “less than half a normal market output.” Insufficient credit or income has kept many prospective buyers on the sidelines, states the blog, which predicts that, with the return of jobs and consumer confidence, construction will continue at a modest, but steady rate into 2014.
Builders’ confidence has been increasing for eight consecutive months and reached its highest level since June 2006, according to the Housing Market Index released yesterday by the NAHB, a Washington-DC trade association. Despite the gains, the index remains below the break-even point of 50, which indicates builders are evenly split on the direction of the housing market.
“The extra building surge in September confirms the steady build-up in builder confidence that has increased for six consecutive months,” states Eye on Housing blog. “Builders have been saying that the potential home buyers they see now are more serious about buying, which has increased builders confidence enough to start additional homes.”
Further indications of the health of the housing market will be available Friday morning when the National Association of Realtors releases existing home sales data for September.