U.S. New Home Starts Jump to Fastest Pace in 4 Years - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

U.S. New Home Starts Jump to Fastest Pace in 4 Years

Posted:
(Photo: WBOC) (Photo: WBOC)

WASHINGTON (AP)— U.S. builders started construction last month on the most homes and apartments since July 2008, more evidence that the housing recovery is gaining momentum.

The Commerce Department said Tuesday that builders broke ground on homes in October at a seasonally adjusted annual rate of 894,000. That's a 3.6 percent gain from September.

Single-family home construction dipped 0.2 percent to an annual rate of 594,000, down from a four-year high in the previous month. Apartment construction, which is more volatile from month to month, rose 10 percent to an annual rate of 285,000.

Applications for building permits, a sign of future construction, fell 2.7 percent to 866,000, after jumping 12 percent in September to a four-year high. Still, permit applications to build single-family homes rose to their highest level since July 2008.

"The overwhelming trend here is a housing market that has clearly shifted into recovery mode," Robert Kavcic, an economist at BMO Capital Markets, said in a note to clients.

Housing starts are 87 percent above the annual rate of 478,000 in April 2009, the recession low. That's still short of the 1.5 million annual rate considered healthy.

Superstorm Sandy had minimal impact on the October figures, the government said. It could delay some construction in November. Still, residential construction activity in region should get a boost soon after when builders begin replacing homes destroyed by the storm.

The housing market has been making consistent gains this year, helping prop up an economy that's being squeezed by a global slowdown and looming spending cuts and tax increases.

Builder confidence rose to its highest level in six and a half years, according to a survey by the National Association of Home Builders/Wells Fargo. Their index of builder sentiment rose to 46 this month, up from 41 in October. It was the highest reading since May 2006, just before the housing bubble burst.

Readings below 50 signal negative sentiment about the housing market. The index has been rising since October 2011, when it was 17. It has surged 27 points in the past 12 months, the sharpest annual increase on record.

Sales of previously occupied homes rose 2.1 percent to 4.79 million in October, the National Association of Realtors said. Sales are near their highest level in five years, excluding temporary spikes in 2009 and 2010 when a homebuyer tax credit boosted purchases.

A key factor fueling the gains is a gradually improving economy, which has increased the number of people looking for homes. At the same time, fewer homes are available for sale. The low supply is helping push up prices.

In addition, mortgage rates have hit all-time lows. And rents are rising, making the purchase of a single-family home or condominium more attractive.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the home builders group.

  • Delmarvawide NewsDelmarvawide NewsMore>>

  • Organization Tracks Shark in Isle of Wight Bay

    Organization Tracks Shark in Isle of Wight Bay

    Friday, August 1 2014 7:30 PM EDT2014-08-01 23:30:14 GMT
    The non-profit organization OCEARH, which tracks sharks all around the world, located one of its tagged tiger sharks in the Isle of Wight Bay on Friday.  The shark is nearly 13 feet long and weighs roughly 1,000 pounds but researchers believe it is not something people should be worried about.More
    The non-profit organization OCEARH, which tracks sharks all around the world, located one of its tagged tiger sharks in the Isle of Wight Bay on Friday.  The shark is nearly 13 feet long and weighs roughly 1,000 pounds but researchers believe it is not something people should be worried about.More
  • Jusst Sooup Closes Doors

    Jusst Sooup Closes Doors

    Friday, August 1 2014 5:55 PM EDT2014-08-01 21:55:49 GMT
    2011 was supposed to be a year of dreams coming true for Jusst Sooup, a local organization that helps feed the homeless in the Rehoboth Beach area. They were featured in a Thanksgiving special by the television program, Extreme Makeover: Home Edition.More
    2011 was supposed to be a year of dreams coming true for Jusst Sooup, a local organization that helps feed the homeless in the Rehoboth Beach area. They were featured in a Thanksgiving special by the television program, Extreme Makeover: Home Edition.More
  • HALO to Open Men's Shelter in Salisbury

    HALO to Open Men's Shelter in Salisbury

    Friday, August 1 2014 5:29 PM EDT2014-08-01 21:29:33 GMT
    Hope and Life Outreach, or HALO, started back in 2004 as a homeless ministry. It quickly grew, adding a shelter for women and children in Salisbury. But the need has been growing, too, which is why HALO is now working on opening a men's shelter.More
    Hope and Life Outreach, or HALO, started back in 2004 as a homeless ministry. It quickly grew, adding a shelter for women and children in Salisbury. But the need has been growing, too, which is why HALO is now working on opening a men's shelter.More
  • Most Popular VideosMost Popular VideosMore>>

  • Mobile Features and Text Alerts

    Mobile Features and Text Alerts

  • NRP Cracking Down on Crabbers

    NRP Cracking Down on Crabbers

    It has been known to happen in the past. Sometimes people catch crabs under the state's size limit and keep them. Now, the natural resources police is stepping up enforcement to make sure that if you break the law, you're going to pay for it.

    More

    It has been known to happen in the past. Sometimes people catch crabs under the state's size limit and keep them. Now, the natural resources police is stepping up enforcement to make sure that if you break the law, you're going to pay for it.

    More
  • Trimper's Rides Being Sued

    Trimper's Rides Being Sued

     The Ocean City amusement park is being sued after an accident on a ride left a two year old boy with a traumatic brain injury two years ago.

    More

     The Ocean City amusement park is being sued after an accident on a ride left a two year old boy with a traumatic brain injury two years ago.

    More
Powered by WorldNow

All content © Copyright 2000 - 2014 Worldnow and WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service