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New home construction rises !

Posted on | July 9, 2010 | No Comments

New home construction rose more than expected in January, while the number of building permits issued in the month dropped, according to a government report issued Wednesday.

new home construction

new home construction


“We’re continuing to see signs of stabilization,” said real estate analyst Mike Larson of Weiss Research. “We had this Olympic ski slope-looking plunge starting in 2005 and 2006, and it looks like we’re almost getting to the bottom of that.”

Larson reports that the increase in single-family activity was an encouraging sign of stabilization, but with such a large supply of existing homes, “nothing suggests a vigorous upturn.”

“I think we’re going to be treading water in this range for some time,” he said. “We’re going to be making small gains or losses throughout 2010, we’re not going to be making new lows or rebounding.”

The construction of new homes climbed to an annual rate of 591,000 during the month which is up 2.8% from December’s revised rate of 575,000, the Commerce Department said. This is an increase of 21.1% from the 488,000 rate in January 2009.

Mr. Larson also said that housing starts picked up in January as the new home supply dwindled.

The number of building permits issued during January fell to a seasonally adjusted annual rate of 621,000. That was 4.9% below the revised December rate of 653,000, but up 16.9% from the January 2009 rate of 531,000.

The decline in building permits and gain in housing starts were each led by activity in the multi-family sector: Multi-family building permits plummetted 26% while starts jumped 17.6%. Meanwhile, single-family housing starts and building permits were both up last month. Single-family starts climbed 1.5% from December and permits edged up 0.4%.

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