New House Construction Rates Up by 22 Percent
Due to an 82 percent increase in the construction of apartment buildings, MarketWatch in Washington recently reported that the US housing industry experienced 22 percent increase in new house building on February. The rate is now adjusted to 583,000, according to the Commerce Department in a statement tit released on Tuesday.
This is a record and the highest rate recorded in 19 years. This is actually the first increase in a span of eight months in the housing industry, a sector that has been experiencing very low situations in the past year because of the economic recession. Data on the housing industry is especially volatile during the winter due to the weather.
Building permits increased by 3 percent in February, amounting to an annual rate of 547,000. On the other hand, permits for single-family units increased by 11 percent, amounting an annual rate of 373,000, the highest percentage increase in the last 18 years.
According to the economists of Wrightson ICAP, the current situation in new house construction is plainly weather-related. If house building permits continue to come until after the season on March, then it can finally be concluded that the new house construction industry has bounced back from the economic recession.
According to John Ryding and Conrad DeQuadros of RDQ Economics, the current level of house building is becoming very low that new house construction will plunge in the coming months. New house construction had already decreased 38 percent in the last three months before the surge in February. According to a survey conducted by MarketWatch on economists, there had even been a forecast of a further decrease to 456,000. This is despite the unexpected increase in the construction of multifamily houses.
However, the current trend in new house construction is still very low compared to last year’s rates. In fact, even with the increase in February, new house construction data was still 47 percent lower than last year’s count. Home builders are currently trying to decrease their inventories of properties that are unsold. This is happening as they face stiff competition from homes being sold by their owners. Relatively, these are a lot cheaper because they are older, and are foreclosed properties. The government and the whole country is still waiting for the time when the whole housing industry is back on track.
