Oct
19

New Home Starts Rise to a Five-Month High

October 19, 2010

More positive news for new home construction.

The U.S. Commerce Department reported today that residential construction rose last month to its highest level since the federal home buyer’s tax credit ended in April.

Family at their new home under constructionThough analysts had expected a decline, housing starts actually increased 0.3 percent in the month of September to a seasonally adjusted annual rate of 610,000 from a revised August estimate of 608,000.

That is 4.1 percent higher than the rate of 586,000 in September 2009.

Single-family new home construction spurred the increase, with starts last month gaining 4.4 percent to a seasonally adjusted annual rate of 452,000 units from August.

That’s the strongest report on new home construction since May.

“Today’s numbers are in line with our latest builder surveys, which indicate that stability is slowly returning to the new-homes market following the declines we saw upon expiration of the home buyer tax credits and the slowing of economic growth this summer,” said David Crowe, Chief Economist of the National Association of Home Builders.

“Builders are receiving more inquiries from potential customers and are carefully responding to renewed consumer interest, although their limited access to credit for new housing production is definitely hampering this process.”

It seems single-family houses are the future as well: While overall permits to build new homes fell 5.5 percent in September, permits to build single-family homes rose 0.5 percent.

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