15% Rise in Housing Starts

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

According to reports from the U.S. Census Bureau and the Department of Housing and Urban Development, privately-owned housing starts showed a 15% rise since August, growing from an annual rate of 758,000 to 872,000 properties.

Compared with last year’s rate of 647,000, current levels have increased by 34.8%. For September, single-family home starts swelled 11%, at a rate of 603,000 from August’s levels at 543,000. In terms of multi-unit buildings with a minimum of five units, September rates measured 206,000.

For authorized building permits on privately owned homes, rates grew 11.6% during the month of September, reaching an annual rate of 894,000 and increasing from August’s 801,000. Compared with levels from last year, rates have surged a whopping 45.1%.

In addition, single-family authorizations in September increased 6.7%, reaching a rate of 545,000 from August’s level of 511,000. For multi-unit buildings, September rates for authorization were approximately 323,000.

The 15% rise in home starts has shown some promise, indicating that the rates for home development have increased. In 2011, rates showed a 100% increase for positive housing demand, demonstrating a rising trend of home purchase over renting.

With current and new home sales growing at 10% on a year-over-year basis, demand has proven to be substantially greater, and mortgage rates have simultaneously reached record-breaking lows. With an increasing amount of consumers purchasing properties, the inventory of pre-existing homes has declined 20% year-over-year and at six month’s supply, which has returned to normal levels required for a healthy mortgage and real estate market.

Many anticipate a full recovery for the home construction industry once the job market is restored. Regardless, the current trends show positive movement for both markets and illustrate a step in the right direction.