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Construction on new U.S. homes nudged up in February with modest gains for single-family homes and apartments, while building permits at best level in more than four years
Encouraging data from the U.S. Commerce Department showed that the new home building industry is getting stronger despite the disappointing confidence data yesterday. The data varied regionally with stronger improvement in the Midwest and actual declines in the Western Region (including Arizona). Still, the trend is in the right direction for the economy.
New home starts for single-family homes rose 0.5% in February to a rate of 618,000, the highest level since June 2008. The data exceeded most economists’ expectations. Previously released January numbers were also revised upwards – this data is often revised and often volatile month-to-month. Applications for new home permits also hit their highest levels since the summer of 2008.
New home construction seems likely to lag demand, which will put upward pressure on home prices – not just for new homes but for resales, where inventory is also very low.
Though new homes represent only a fraction of the housing market, they have an out size effect on the economy because of the labor-intensive nature of home-building (creating jobs). This is why these data are watched so closely by Wall Street.
To buy or sell any Flagstaff home, please contact me: Ann Heitland at RE/MAX Peak Properties