Home construction surge could lift U.S. economy
U.S. home construction is making a comeback that could invigorate the economy's still-weak recovery.
Builders last month started construction on single-family houses and apartments at the fastest rate in more than four years, the Commerce Department said Wednesday. And they laid plans to build homes at an even faster pace in coming months -- a signal of their confidence that the housing rebound will last.
The pace of construction has grown steadily in the past year, and analysts expect it to keep rising. The increase has been fueled by record-low mortgage rates, more stable home prices and a shortage of previously occupied homes for sale.
More new homes could accelerate growth and help boost hiring, especially in areas like construction, home improvement and retailing. More homeowners lead to more people buying home furnishings.
"I don't have that crystal ball, but I will say we're seeing the best sales we've seen in five years, and it sure feels good," Douglas Yearley, CEO of Toll Brothers Inc., said in an interview with The Associated Press. Toll builds luxury homes in 20 states.
The government's report Wednesday on home construction in September was filled with encouraging details.
Overall, the number of homes that were started increased 15 percent from August to a seasonally adjusted annual rate of 872,000. That's the fastest rate since July 2008.
Single-family homes, which made up more than two-thirds of the new construction, rose 11 percent to 603,000. That was also the quickest rate in four years. Apartment construction, which can be more volatile from month to month, rose 25.1 percent.
And applications for building permits, a sign of future construction, jumped nearly 12 percent to an annual rate of 894,000, another high point since July 2008.