Friday, October 19, 2012
New Home Building Data: Good News for All
A report by the Commerce Department showed that the rate at which builders started new construction on single family homes and apartments was the highest last month than it has been in four years. Plans for continued building are set at an even higher rate than we have recently seen, a clear sign of buyers taking advantage of record low mortgage rates, low inventory and builder confidence on the rise.
Not only is this good for the real estate market in general, but new home construction creates jobs which is essential in today’s economy.
In the last two months we have seen a fifteen percent increase in new construction. About two thirds of this increase deals with single family homes while the other portion is made up of apartment homes. This coupled with a twelve percent increase in building permits shows that there are no plans of slowing down anytime soon. Homebuilder stocks saw am increase as a result of the increase in permits and plans to keep building. The National Association of Home Builders reports that this new construction data pushes home builder confidence up to a six- year high, and is consistent with this year’s continual up-ward tick. Some people may ask just how much of an impact does this have on our economy. Economists from the home builders group estimate that with each new home built, creates an average of three new jobs and about ninety thousand in tax revenue.
New home sales are up twenty eight percent from this time last year. Many buyers are attracted to home builder’s warranties, higher energy efficiency standards, and a general feeling of more home for their dollar. The Florida market is part of plans for Toll Brothers Construction to continue building luxury homes in and around the coastal regions.
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