Monday, October 12, 2009

More signs of a housing revival

An excerpt from the CNN article:

NEW YORK ( -- New home building increased in August, a government report said Thursday, further signaling that home builders are regaining their confidence in the housing market recovery.

The Census Bureau reported Thursday that builders broke ground for 598,000 new homes during August, up 1.5% from a revised 589,000 in July. That was considerably higher than industry experts were predicting: The consensus analyst forecast compiled by was for 583,000 new starts.

Building permits rose 2.7% to 579,000 from a revised 564,000 in July.

On Wednesday, the National Association of Home Builders reported their index of homebuilder confidence had risen a point to 19, its highest level since May 2008.

Helping to boost demand for new homes has been the first-time homebuyer tax credit, which has enabled many builders to reduce their inventories of unsold homes.

"Many builders have not only reduced excess inventory, but now are actually reporting such low inventory that they need to start more homes to replace those they've just sold," said Brad Hunter, chief economist for Metrostudy, a real estate analytics firm.

Both starts and permits are still well off from their levels of a year ago. The number of starts is down 29.6% from 849,000 last August, and permits dropped 32.4% from 857,000 last year.

The housing starts report was the latest in a series of releases that indicate that the market may have bottomed. These include improvement in new home sales, existing home sales and housing prices.

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