(AP)–U.S. builders started work on homes in December at the fastest pace
since the summer of 2008 and finished 2012 as their best year for
residential construction since the early stages of the housing crisis.
The Commerce Department said Thursday that builders broke ground on
houses and apartments at a seasonally adjusted annual rate of 954,000.
That's 12.1 percent higher than November's annual rate and nearly double
the recession low reached in April 2009.
For the year, builders started work on 780,000 homes. That's still
roughly half of the annual number of starts consistent with healthier
markets. But it is an increase of 28.1 percent from 2011. And it is the
most since 2008 — shortly after the housing market began to collapse in
late 2006 and 2007.
Steady job gains, record-low mortgage rates and a tight supply of new
and previously occupied homes available for sale have helped boost sales
and prices in most markets. That has made builders more confident.
“The strong rise in single-family starts is a clear indication of
builder confidence in the sales outlook,” said Pierre Ellis, an
economist at Decision Economics, in a note to clients.
In December, the pace of single-family home construction, which makes up
two-thirds of the market, increased 8 percent. It is now 75 percent
higher than the recession low reached in March 2009.
Apartment construction, which is more volatile, surged 23 percent last month.
Applications for building permits, a sign of future construction, inched up to a rate of 903,000 — a 4 ½ year high.
Confidence among homebuilders held steady in January at the highest
level in nearly seven years. But builders are feeling slightly less
optimistic about their prospects for sales over the next six months,
according to a survey released Wednesday.
In November, sales of previously occupied homes rose to their highest
level in three years, while new-home sales reached a 2 1/2-year high.
Those factors have helped make homebuilders more confident and spurred
new home construction. But homebuilders' are still warily watching the
current standoff in Washington between President Barack Obama and
Congress over several approaching budget deadlines, including the need
to boost the nation's $16.4 trillion borrowing limit.
Though new homes represent less than 20 percent of the housing sales
market, they have an outsize impact on the economy. Each home built
creates an average of three jobs for a year and generates about $90,000
in tax revenue, according to data from the homebuilders association.
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