October 28, 2020

Homebuilding Permits Rise, Exceeding Forecasts

The agency said building permits increased 3.6 percent to a seasonally adjusted annual rate of 899,000 units, the highest level since July 2008. That was well above economists’ expectations for a rate of 875,000 units.

In contrast, construction starts fell 3 percent to a rate of 861,000 units. That came after three consecutive months of solid gains and a three-month moving average that showed a firming trend.

“The trend is definitely up. Housing is going to make a small contribution to economic growth in 2012, and I would expect that homebuilding will continue to improve through 2013,” said Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh.

While last month’s decline in groundbreaking prompted some economists to trim already meager growth forecasts for the fourth quarter, homebuilding is expected to add to economic growth this year for the first time since 2005.

In the 12 months through November, housing starts were up 21.6 percent, while permits gained 26.8 percent.

A separate report from the Mortgage Bankers Association showed that demand for home loans fell last week as mortgage rates ticked higher. Applications for loans to buy a home rose in each of the previous five weeks.

Though residential construction accounts for only about 2.5 percent of gross domestic product, economists estimate that for every single-family home built at least three full-time jobs are created.

Last month, permits to build single-family homes dipped 0.2 percent to a 565,000-unit pace. Permits for multifamily homes increased 10.6 percent to a 334,000-unit rate, reflecting buoyant demand for rental apartments.

“Longer term, we may have seen a shift in psychology, which is putting an extreme pressure on builders to provide multifamily homes. Young families are no longer clamoring to buy,” said Lindsey M. Piegza, an economist at FTN Financial in New York.

Article source: http://www.nytimes.com/2012/12/20/business/economy/housing-starts-slip.html?partner=rss&emc=rss

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