An article on online.wsj.com reports that home building started gaining momentum in September 2012, and is now running at its highest level in 4 years – a turnabout that could have a positive effect on the economy and the job market.
According to the Commerce Department, in September 2012, builders commenced work on new apartments and houses at a seasonally adjusted yearly rate of 872,000 units. This was up by 15 percent from August and up by 34.8 percent from September 2011 – far exceeding expectations. The number of starts was the highest since 2008.
Many economists say the rise in home building, if sustained, will boost economic growth and job creation. A trade group, the National Association of Home Builders, estimates that every new home built will generate $90,000 in new tax revenue and create three full-time jobs.
A chief economist says the path between now and when a sustainable pace of home building is reached should cumulatively add 2 percentage points to the country’s gross domestic product. He says this could take 3 or 4 years, but, at the present pace, it might be sooner than later.
In September 2012, the number of new home building permits increased by 11.6 percent to an annual level of 894,000 – again, this is the highest since 2008. Of the total number of housing starts in September 2012, sixty-nine percent were single-family homes – 603,000 units. This translated to a 43-percent improvement from 2011.
While businesses might still be holding back on big investments, consumer attitude has brightened up. This is clearly evident by the boost in the home building industry.