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Housing Starts Hit 4-Year High in September

Posted on October 17, 2012 by RedBuilt

This article from USA Today reports that “builders started construction on single-family homes and apartments in September at the fastest pace since July 2008, a further indication that the housing recovery is strengthening.” (paragraph 1). It further proves its point with the following statistics:

  • “The Commerce Department says builders broke ground at a seasonally adjusted annual rate of 872,000 in September. That's an increase of 15% from August.” (paragraph 2).
  • “Applications for building permits, a sign of future construction, jumped nearly 12% to an annual rate of 894,000, also the highest since July 2008.” (paragraph 3).
  • “The strength in September came from both single-family construction, which rose 11%, and apartments, which increased 25.1%.” (paragraph 4).
  • “Construction activity is now 82.5% higher than the recession low in April 2009. Activity is still well below the roughly 1.5 million rate that is consistent with healthier markets.” (paragraph 5).
This article suggests that this improvement in housing starts is a direct result of “record-low mortgage rates” and it suggests that “the Federal Reserve's aggressive policies could push long-term interest rates even lower, making home-buying affordable for the foreseeable future.” (paragraph 8). While we think the “record-low mortgage rates” are certainly responsible for a portion of the 11% increase in single-family construction, we think this increase is also due to lower inventories as housing markets are starting to level out and in some cities, even rebound. This positive news is exciting to us at RedBuilt™ as we strive to thrive in this new economy… especially since residential construction activity is leading indicator of commercial construction opportunity. Read the full article here.

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Great to to hear this!!!

By Renaldo Montenegro on 2012 10 17.