Straight from the presses at CNN:
NEW YORK (CNNMoney.com) — New home construction surged to the highest level in four months in August, a government report showed Tuesday. Housing starts, or the number of new homes being built, jumped 10.5% to a seasonally adjusted annual rate of 598,000 in August from a revised 541,000 in July, the Commerce Department said.Economists were expecting a rate of 550,000 housing starts, according to a consensus estimate from Briefing.com.
The number of new homes being built in August was up 2.2% from a year ago.
“This is a step in the right direction, but you have to remember that we’re still hovering around all-time lows,” said Kevin Smith, a senior vice president at Chapdelaine Credit Partners. “It’s clear that we’re far from being out of the woods.”
Despite the monthly rise, it’s too early to look at this as a positive trend for the housing market until more jobs are created, he said.
“People who don’t have jobs aren’t buying homes,” Smith said. “You have to have job creation to see housing improve, and people need to actually have the confidence that they are going to keep that job for a year or two.”
New homes by sector: New construction of single-family homes, the key sector of the housing market, rose 4.3% over the month to an annual rate of 438,000.
The annual rate for new construction of multi-family homes – buildings with 5 or more units – was 147,000.
Building plans: Permits for future construction rose to a seasonally adjusted annual rate of 569,000 last month, up 1.8% from July and the highest level in two months. Economists were expecting 560,000 permits in August.
Despite the monthly gain, permits were down 6.7% from the same time last year.
A bit of a confusing number, with some up and some down all wrapped in one. We are still down from what it had been last year, and may take years to get back to that level. However the numbers, and just a look around, shows things are getting better.
One other item that has changed is the amount of work it takes to get construction jobs. More time is spent bidding projects and estimating work than before. There is a surplus of contractors all fighting for the same work making precise bids a requirement.
It is good to see the numbers turning around, now is the time to make sure you are ready to handle the extra work that comes along with new work.