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New home construction activity picking up

New construction dn-3

The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) issued their report on New Residential Construction for January 2012 showing an increase in single-family home building permits from the month before of 0.9 percent and a 1.0 percent decrease in new home starts compared to the month before.

Highlights from the January 2012 Report:

  • Building permits issued for single-family residences were at an annual rate of 445,000 homes which is 0.9 percent above the prior month and an increase of 6.2 percent from a year before.
  • Housing starts for single-family residences were at an annual rate of 508,000 which is a decrease of 1.0 percent from the prior month and an increase of 16.2 percent from a year before.
  • Homes completed were at an annual rate of 389,000 homes, which is a decrease of 14.9 percent from the prior month and a decrease of 6.7 percent from a year before.

As I say every month, we need to remember that all the numbers above are “seasonally adjusted” annual rates and the year over year comparisons are just comparing the numbers for the current month versus the a year before. Another way I like to look at where things stand is to simply look at the year to date data; actual numbers, not seasonally adjusted, compared to last years ytd numbers at this same time. I think this may give a little better comparison so those numbers are below:

  • In January, there were 29,500 permits issued for new homes compared with 26,300 the same month of the prior year, for an increase of 12.2 percent.
  • In January, there were 32,900 new homes started compared with 26,600 the same month of the prior year, for an increase of 23.4 percent.
  • In January, there were 25,800 new homes completed compared with 28,400 the same month of the prior year, for a decrease of 9.2 percent.

It seems evident to me, that the pace of new home construction is picking up. Granted, it’s not going gang busters by any means, but I think we are going to see the trend continue and see the pace of both new home permits as well as new home starts, increase fairly consistently over the next few months. As spring nears, we should see the new home starts spike a little, followed by completions increasing in the summer. My hope and prayer is that we see new home sales increase along the way as well.

 

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