Industry gains benefit all, including Arizona new-home buildersPosted 10/20/2014
September was a great month for the housing industry as housing starts in the U.S. surpassed the million-mark for the third time this year, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Rising 6.3 percent during the month and 17.8 percent year-over-year, groundbreakings reached a seasonally adjusted annual rate of 1.017 million units.
The latest figures have experts breathing a sigh of relief that August’s dip in productivity was just an anomaly rather than a market reversal. “I expect we will see a continued recovery as job creation grows and consumers gain more confidence in the housing market,” said National Association of Home Builders (NAHB) Chief Economist David Crowe.
Despite the recent uptick in production, builder confidence dropped five points to a level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released last week. The HMI, which gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor,” compiles figures from a monthly survey that NAHB has been conducting for 30 years.
The slight dip, however, is not too concerning to experts, as many predicted a drop after the HMI posted a nine-year high in September. Even with the drop in confidence among home builders, the HMI report is still positive, as any number above 50 indicates that more builders view the market as favorable rather than as poor.
While housing production is trending upward, single-family housing starts remained relatively flat, increasing only 1.1 percent to 646,000 units. It appears builders are betting on multi-family housing, with September groundbreakings on buildings with five or more units increasing 18.5 percent from August to 353,000 units. Either way, experts agree the new construction benefits everyone. As production continues to rise steadily, pent up demand, combined with steady job gains and historically low mortgage interest rates, should continue to drive the market upward.
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