The Home Buyer's Korner

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May 19th, 2015

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New Home Starts for April 2015

New Home Sales

Building permits hit a seven-year high and groundbreaking for new homes rose by 20.2 percent for April! That’s sorely needed good news from the Commerce Department for the housing sector, home builders and the national economy as a whole. Though new homes represent only about 10 percent of the overall housing market, it has an outsize impact on the economy and contributes to other purchases like furniture and appliances. Furthermore, each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB data.

Furthermore, the report suggests that our inventory shortage, which is sorely holding back the housing recovery, should ease in coming months.

Housing starts stood at a seasonally adjusted, annual rate of 1.14 million in April. That pace is 9.2 percent higher than the rate of 1.04 million in April 2014. Tuesday’s numbers surpassed most expectations of economists ahead of the release.

Single-family housing starts in April rose 16.7 percent above its level in March, hitting a seasonally adjusted, annual rate of 733,000. Starts on buildings with five or more units were up by 32 percent in April, to a seasonally adjusted, annual rate of 389,000.

More good news came from April’s report and marked the highest level of building permits issued since June 2008, when the seasonally adjusted, annual rate was 1.18 million.

The number of building permits issued in April rose 10.1 percent over March, to a seasonally adjusted annual rate of 1.14 million. It was 6.4 percent higher than for the same time last year, when the estimate stood at 1.07 million.

Single-family permits were up by 3.7 percent in April compared to March at a seasonally adjusted, annual estimate of 666,000. Buildings with five units or more hit a permit rate of 444,000 in April, up 20 percent compared to March.

Despite the strong numbers, builder confidence in the market for newly constructed, single-family homes fell two points in May to a level of 54, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index, released yesterday. However, a reading of 50 or higher means that more builders rate conditions are good than poor and the measure has now hit that mark for eleven consecutive months.

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