Last month saw a massive increase in the number of new home constructions and building permits being handed out, a big sign that the new-home market is finally pulling itself out of one of its worst slumps in living memory.
The Washington Post reported that last month, builders broke ground on new homes at a seasonally-adjusted rate of 685,000 units, representing a 9.3% increase from October – which is the highest level since back in April 2010. Compared to November 2010 meanwhile, new home starts were up 24.3%.
Driving November’s increase was the construction of multi-family home units (apartments), which sky-rocketed by 25.3%. Single-family home construction showed a less impressive increase, rising by just 2.3% in November.
The number of building permits granted also increased last month, by 5.7%, reported the Washington Post. This is the biggest increase we have seen since March 2010, and once again the increase was driven by apartment construction.
Another positive sign of a rebound in the construction industry is that builder confidence rose for the third consecutive month, according to the National Association of Home Builders.
The NAHB/Wells Fargo Housing Market Index reached 21 points in December, the highest point it has reached since May of last year. While this is still way below the 50 point total which would indicate that more builders believe conditions are good as opposed to those who view things as being poor, last month represents the third consecutive month in which we have seen an increase, a sign that “pockets of recovery are slowly emerging in scattered markets,” says the NAHB’s Bob Nielsen.