Monday, October 19, 2009

Housing Starts Show Economy's Strengthening, Economist Says

An excerpt from Housing Giants:

August housing starts increased 1.5 percent to 598,000, according to today's new residential construction report from the U.S. Census Bureau and the Commerce Department. Single-family starts slipped 15,000, while multi-family starts jumped 24,000. The single-family drop reflects a not unexpected brief pullback from the initial surge in construction spurred by the $8,000 tax credit for new home buyers. The multi-family jump includes some catch up after a random, below trend number of starts in July. Total housing starts remain on a modest but erratic upward trend into the winter.
Overall, the housing starts report confirms that the market is progressively strengthening. Permits increased 15,000 to the highest level since last November. Un-started permits continued to decline. This means that current starts are largely either units already sold or needed as model homes or homes available for a quick finish. The current starts level is sustainable because it includes few speculative homes. Generally, home builders lack the credit for speculative starts.

Read the whole article here:

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