Home Construction Gains Steam; Record Low Mortgage Rates

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New home construction in Manalapan, NJ. K Hovnanian houses.

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NEW YORK, NY – Home construction continued to pick up steam in February as builders filed for the most permits in nearly five years, and housing starts also climbed.

Building permits, which are seen as a barometer of builders’ confidence in the housing market, jumped about 5% from January’s level and 34% from a year ago, to an annual pace of 946,000. That’s the best month for permits since June 2008.

Additionally, the Census Bureau reported that builders started construction at an annual pace of 917,000 homes in the month, up slightly from the pace in January, and up nearly 28% from year-ago levels.

The housing market has been helped by a number of factors in recent months, including increased sales of both new homes and previously-owned houses, a drop in foreclosures, and near record low mortgage rates. A decline in the nation’s unemployment rate is also helping. And the pick up in home building and construction hiring is one of the factors helping to bring the unemployment rate down, as builders scramble to look for workers.

But a survey of members by the National Association of Home Builders released Monday showed builder’s confidence taking a step back in March, as builders reported that rising costs of raw materials and labor shortages were squeezing business despite increasing demand.

Still the broader housing recovery is one of the factors economists believe will lift the overall economy in the year ahead.

By Chris Isidore

The-CNN-Wire™ & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

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