U.S. Builders Start More Single-Family Homes; Permit Requests Surge

by The Associated Press Jun 19th 2012 10:05AM
home buildersBy MARTIN CRUTSINGER

WASHINGTON -- U.S. builders started work on more single-family homes in May and requested the most permits to build homes and apartments in three and a half years. The increase suggests the housing market is slowly recovering even as other areas of the economy have weakened.

The Commerce Department said Tuesday that builders broke ground on 3.2% more single-family homes in May, the third straight monthly increase.

Overall housing starts fell 4.8% last month to a seasonally adjusted annual rate of 708,000. But that was entirely because of a 21.3% plunge in apartment construction, which can be volatile from month to month.

The government also said April was much better for housing starts than first thought. The government revised the April starts to 744,000 -- up from an initially reported 717,000 and the fastest building pace since October 2008.

And builders are more optimistic about the next 12 months. They requested more permits to build homes, a gauge of future construction. Permits increased to a seasonally adjusted rate of 780,000 -- the most since September 2008.

Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. Yet the increases add to other signs that the home market may finally be starting to recover nearly five years after the housing bubble burst.

Builders have grown more confident since last fall, in part because more people are expressing an interest in buying a home. Cheaper mortgages and lower home prices in many markets have made home buying more attractive. Many economists believe that housing construction could contribute to overall economic growth this year for the first time since 2005.

"We continue to expect housing activity to increase gradually in coming months and residential investment to make a positive ... contribution to GDP growth," said Peter Newland of Barclays
By region of the country, housing starts rose 14.4% in the West, but dropped in other parts of the country. The declines primarily reflected the weakness in apartment activity.

Still, the pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.

Many people are still having difficulty qualifying for home loans or can't afford larger down payments required by banks. Some would-be home buyers are holding off because they fear that home prices could keep falling.

The economy is growing only modestly and job creation slowed sharply in April and May. U.S. employers created only 69,000 jobs in May, the fewest in a year.

Though new homes represent just 20% of the overall home 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 taxes, according to data from the Home Builders.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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17 Comments

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cpo1514

Are these Jimmy Carter HUD homes???????

June 22 2012 at 5:57 PM Report abuse +2 rate up rate down Reply
chris1011

Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

June 22 2012 at 11:22 AM Report abuse -3 rate up rate down Reply
democracks0

Somehole rushes off to cash his welfare check at the beginning of every month.

June 19 2012 at 5:17 PM Report abuse -2 rate up rate down Reply
Somey

Just rush off and buy home builder stocks, the CEOs of these companies need to dump their stock options at a hefty profit. .

June 19 2012 at 5:01 PM Report abuse +1 rate up rate down Reply
1 reply to Somey's comment
democracks0

SIMP!

Obamas a catastrophe

June 19 2012 at 5:13 PM Report abuse rate up rate down Reply
chris1011

Let's try austerity here and see what happens:

If Mitt Romney is elected president, the U.S. will experience an economic disaster the likes of which have been recently seen in Ireland, according to Paul Krugman.

"Ireland is Romney economics in practice," the Nobel-Prize winning economist and New York Times columnist said on the Colbert Report on Monday. "I think Ireland is America's future if Romney is president." (h/t Politico.)

"They've laid off a large fraction of their public workforce, they've slashed spending, they've had extreme austerity programs, they haven't really raised taxes on corporations or the rich at all, they have 14 percent unemployment, 30 percent youth unemployment, zero economic growth," Krugman said.

Romney, the likely Republican nominee for president, recently suggested that the government should lay off more firemen, policemen, and teachers, according to CNN. Romney's campaign website says that if elected president, Romney would aim to slash federal spending at least 18 percent by the end of his first term.

Conservatives like Romney loved Ireland's economic program before the country fell into a depression, in part because it had "the lowest corporate tax rates," Krugman said on the Colbert Report. Ireland fell into recession again at the end of last year.

June 19 2012 at 2:39 PM Report abuse +1 rate up rate down Reply
2 replies to chris1011's comment
chris1011

For those of you who loved Ronald Reagan, he also had over 10% unemployment, and what did he do to fix that? Certainly not austerity. He spent and spent and spent, government money was flowing like water to the military industrial complex. Some might say it was wasted on bombs and missiles, but it did bring us out of a deep recession. He did not have a party of NO to deal with.

June 19 2012 at 2:42 PM Report abuse rate up rate down Reply
1 reply to chris1011's comment
democracks0

You are right we did not have the party of democracts, the know nothing do nothing party.

Obamas a fiasco

June 19 2012 at 3:50 PM Report abuse -1 rate up rate down
democracks0

Arianna's copy and paste poster child is hard at work today

Obamas a disaster.

June 19 2012 at 3:49 PM Report abuse +1 rate up rate down Reply
donut999

Silly article. Of course housing starts are going to go up. Where else could they go from the depths
of hell where they have been? So, good news, and swell to hear. Consider the alternative. Not everyone
is broke, many prefer new homes, and they are getting swell deals on them.

June 19 2012 at 1:58 PM Report abuse -4 rate up rate down Reply
1 reply to donut999's comment
vlady1000

yep, New housing is up 100% in my area....they built 2 new ones.

June 19 2012 at 11:46 PM Report abuse rate up rate down Reply
Setanta

so all these foreclosed homes sitting around and they're building new ones ==of course it makes sense as the same bs over here---vacant apartments and new multiple dwellings getting smacked up nonstop-
we know the game as these apartments will be loaded up with section8 as in block busting on a greater scale--they've done IT before and destroy entire areas and morons pay THEIR FULL rent all the while on the first couple of floors are section 8.

June 19 2012 at 11:49 AM Report abuse -2 rate up rate down Reply
1 reply to Setanta's comment
itacurubi

Well ... location is important. Presumably builders are not building new homes in locations where there are already fairly new, foreclosed houses. It makes no sense for a builder to look at the housing market as one market.

June 19 2012 at 1:33 PM Report abuse rate up rate down Reply
jim brady

The article makes no sense.Housing starts were down yet it says they were up.

June 19 2012 at 11:08 AM Report abuse rate up rate down Reply
2 replies to jim brady's comment
chris1011

Lemme guess - your cup is always half empty, right?

June 19 2012 at 11:56 AM Report abuse +1 rate up rate down Reply
3 replies to chris1011's comment
itacurubi

It makes sense: Both the title and "topic sentence" of the article referred to "single-family homes" being up. It went on to mention that the increase in single-family housing starts would have brought the total housing number up significantly had apartment building starts not gone way down.

June 19 2012 at 1:36 PM Report abuse -2 rate up rate down Reply
captmerit

dreaming

June 19 2012 at 10:58 AM Report abuse +1 rate up rate down Reply