According to the National Association of Home Builders (NAHB), housing starts rose 6.8 percent in the month of May. The seasonally adjusted annual rate of 914,000 units nationally was due primarily to increased production of multifamily units. This followed a spike in permits for such units issued in April. Single family unit permitting, and housing starts has been holding steady from March through May.
However, since permitting is a leading indicator for subsequent housing starts, the really encouraging news is that the total seasonally adjusted annual permits issued in May rose to 974,000. In a year over year comparison, building permits issued in May 2013 are 28% higher than the total issued in May 2012. That most likely translates to a continued upward trend for housing starts in June. The summer months already tend to be strong when it comes to residential housing transactions, and the permit totals indicate that this year will have increased activity.
“The outlook for housing continues to brighten as builders respond to increased demand for new homes and rental apartments.” Said NAHB Chairman Rick Judson, a home builder from Charlotte, NC. “While challenges with regards to the cost and availability of building materials, lots and labor are still keeping the pace of improvement in check, both builders and consumers are more confident about their prospects in the current marketplace.”
In addition to the positive news over new housing units, the Wall Street Journal recently highlighted recent growth in the house flipping market. Investors swarming back into the real estate market to buy up the homes previously abandoned or foreclosed are in much better positions financially than during the prior housing bubble so this new trend is another indicator of the generally optimistic outlook for the real estate market.
All of this is particularly critical information for people who work in the industries that support new housing construction as well as renovations and remodels. Contractors will see increasing demand for their services which means that they will need access to the skilled labor needed to complete their projects.
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