Recovery in New-Home Market Accelerates

The recovery of the new-home market picked up speed in August, with builders beginning construction on more single-family homes and building permits soaring to a five-year high, the Commerce Department reported Wednesday. 

Construction starts on single-family homes rose 7 percent in August, reaching its highest point in six months, according to the Commerce Department. 

“Home building seems to be holding up decently in the higher mortgage rate environment, probably due to the support of strong underlying fundamentals: thin inventories and steady household formation,” says economist Guy Berger.

Single-family housing starts rose across the country, with the West seeing the biggest gain: 17.5 percent. They increased by 9.6 percent in the Northeast, 7.1 percent in the Midwest, and 2.3 percent in the South. 

"This is the kind of signal we've been looking for, with single-family starts and permits up or holding steady across every region in the nation," says David Crowe, chief economist for the National Association of Home Builders. "Today's report is reflective of gradual improvement in buyer confidence in the overall market and our recent surveys that indicate a solid outlook for single-family production. On the multifamily side, we are catching up with underlying rental demand. We expect to see additional multifamily starts in the future, but not as rapid a pace of growth as we've seen in the past."

In August, starts within the multi-family market — which includes the volatile apartment and condo sector — dropped 11.1 percent. Higher mortgage rates could be making developers in the multifamily sector more cautious about starting new projects, Reuters reports. 

Meanwhile, the gains are expected to continue for the single-family housing market. Building permits for single-family homes, a gauge for future construction, rose 3 percent in August to its highest level since May 2008. Building permits for multifamily homes plummeted 15.7 percent in August. 

Source:  National Association of Home Builders and “Home Construction Rises, as Do Building Permits,” Reuters (Sept. 18, 2013)

About Ady Simion (Realtor and Public Notary)

Ady Simion was named in the Top 1% of all agents for NRT LLC a subsidiary of Realogy that operates a variety of real estate offices under brands such as Coldwell Banker, Sotheby's International Realty, Century 21, The Corcoran Group, and the technology-based brokerages ZipRealty and Climb Real Estate. NRT has 787 offices and 47,000 sales associates. Selling and buying property can be very stressful but with the right agent it can be profitable and a fun experience. Ady is also a Notary Public and being a people person he wants to help negotiate for his clients making their transactions as smooth as possible. Ady’s goals are simple: He wants to be the best source of information on the Los Angeles area Real Estate market, as he assists clients through each transaction with care and professionalism. He is proud of his large referral base of clients who have placed their trust in him over the years. Why him, when there are so many good people out there?!?! • Sellers will have their property exposed to the largest team of sales professionals in the world by far. Coldwell Banker Agents sale more homes than anyone else. • Buyers will have the opportunity to view more properties exclusively. • And most importantly when you hire him you get a whole team working for you not just “only one person”. Ady Simion started his Professional Career as an Insurance Agent, and then mastered the Mortgage Industry focusing on helping buyers and sellers achieve their life dreams. He now is an Agent with the Largest Residential Real Estate Company in the nation and the world, Coldwell Banker, at the Pasadena office which is the leader in the areas in which he specializes. After finishing College Ady has consistently been a Top Producer in every office/business he worked at. He speaks English, Romanian and Spanish. Real Estate is constantly changing and working with an agent that has been involved in the Real Estate buying/selling process most of his life is always beneficial for clients. Call, text or e-mail him or just stop by to say Hi and ask any real estate questions you may have.

Posted on September 19, 2013, in Uncategorized. Bookmark the permalink. Leave a comment.

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