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New home construction on the increase

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 February 2012 showing an increase in single-family home building permits from the month before of 4.9 percent and a 9.9 percent decrease in new home starts compared to the month before.

Highlights from the February 2012 Report:

  • Building permits issued for single-family residences were at an annual rate of 472,000 homes which is 4.9 percent above the prior month and an increase of 23.6 percent from a year before.
  • Housing starts for single-family residences were at an annual rate of 457,000 which is a decrease of 9.9 percent from the prior month and an increase of 17.8 percent from a year before.
  • Homes completed were at an annual rate of 421,000 homes, which is an increase of 8.2 percent from the prior month and a decrease of 12.7 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 February, there were 34,600 permits issued for new homes compared with 26,500 the same month of the prior year, for an increase of 30.1 percent.
  • In February, there were 31,500 new homes started compared with 26,600 the same month of the prior year, for an increase of 17.3 percent.
  • In February, there were 28,600 new homes completed compared with 32,900 the same month of the prior year, for a decrease of 13.0 percent.

New home construction continues to pick up, every so slowly, but it is on the rise. The real estate market in general has been showing increased activity however home prices are still falling in many markets. It will be interesting to see what happens once we go into the spring market.

 

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