New Home Construction at 8-Yr High in US
Published By : 19 Aug 2015 | Published By : QYRESEARCH
Construction of new homes in the United States reached an all time high in the month of July for the first time in nearly eight years, signaling that the construction and building industry is likely to pick up in the latter half of this year.
Residential starts climbed 0.2 per cent to reach an annualized rate of 1.21 million, which is the highest since October in 2007. This was up from a pace of 1.2 million in the previous month, which, according to a Commerce Department report, was higher than what was earlier estimated.
Historically low mortgage rates and increasing employment are attracting buyers and rising prices driven by the dearth of homes on the market is a major incentive to begin new developments. Data shows that builder sentiment is at a decade high in the month of August and this emphasizes on the view that housing rebound is likely to remain on track despite the fact that the Federal Reserve stands to fuel borrowing costs.
Eric Green, head f economic research in the US at New York based TD Securities said that there is sufficient demand and there is slight catch up going on in terms of housing construction. It is TD Securities who predicted a pace of 1.2 million. Eric Green added that adding homes in this manner will have a major multiplier impact on the economy, in housing related jobs, sales, and consumption. The economy is exactly where it needs to be when it comes to housing.
Building permits dropped to an annualized rate of 1.12 million. The drop of 16.3 per cent was the highest since July of 2008. The building permits were forecast to slip to a rate of 1.23 million after the 1.34 million decrease in the previous month.