U.S. New Home Starts at Fastest Pace in Four Years

November 30, 2012

chicago new homes constructionMore builders started construction on new homes and apartments last month than in any month since July 2008, according to the Department of Commerce.

Builders broke ground on more than 894,000 homes in October, which is a 3.6 percent gain from September. Housing starts are 87 percent above the recession all-time low of 478,000, though the market needs an average of 1.5 million housing starts per year in order to be considered healthy. Apartment construction also experienced a 10 percent increase from September with a total of 285,000 units now under construction.

As 2013 approaches, many builders may be wondering how new home starts will be affected by Hurricane Sandy. While construction is expected to slightly decline in November, residential construction activity will most likely increase during the spring when builders begin replacing damaged homes.

In addition to October being a great month for housing starts, builder confidence has increased. According to a survey by the National Association of Home Builders/Wells Fargo, builder sentiment is at a 46, the highest reading since May 2006.

The improving economy is the number one factor driving new homes in Chicago construction permits. More people are finding jobs and qualifying for low mortgages, which is causing an increased demand for housing.

Do you think home building will increase this month?

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