U.S. Construction Expected to Have Dipped in January
Published By : 18 Feb 2015 | Published By : QYRESEARCH
Economists waiting for the Commerce Department’s report on home construction in January 2015 expect that housing starts dipped in January, falling by 2% to an annual rate of 1.07 million, when adjusted seasonally.
In December, on the other hand, housing starts had risen 4.4% from November to 1.09 million. However, the number of housing permits approved in December had fallen, indicating a drop in housing starts in January.
Significant growth in job opportunities in a previously low market is expected to help aid sales of homes and apartment construction in the rest of 2015. Due to the strong recovery of the economy, a million new paychecks were paid out in the past three months and 3.2 million jobs have been added over the past 12 months, translating to a 2.3 percent increase.
The recent gain in employment rates have fueled expectations that an increasing number of millennials will be signing new leases on apartments and more families will be upgrading to newly built houses, boosting the construction industry.
Metro areas, showing the fastest growth rates in jobs, are experiencing a proportionately greater increase in home prices, according to Jed Kolko, chief economist at real estate firm Trulia. According to him, nine out of the 10 metro areas with the biggest year-over-year price increases showed a job growth rate of at least 2%.
Higher housing prices have historically led to more construction activity. While new domestic property sales are still well below their levels before the recession, the new year holds a lot of promise for the industry.
Builders are projected to break ground on more than 1 million new houses this year with construction activity expected to strengthen further in the next year to close to one and a half million homes constructed and more than 1.6 million in 2017, according to Macroeconomic Advisers.