Related News

Home » Business » Real Estate

Optimism fuels new home building

CONSTRUCTION of new homes in the United States rose last month to the highest level in seven months, a sign builders are starting to regain confidence as they emerge from the housing bust.

The Commerce Department yesterday said construction of new homes and apartments climbed 3.6 percent last month to a seasonally adjusted annual rate of 582,000 units, from an upwardly revised rate of 562,000 in May.

That was better than the 530,000-unit pace economists expected, and the second straight increase after April's record low of 479,000 units.

In another encouraging sign, applications for building permits, seen as a good indicator of future activity, rose 8.7 percent last month to an annual rate of 563,000 units. Economists polled by Thomson Reuters expected an annual rate of 520,000 units.

The jump in housing starts reflected a more than 14-percent rise in construction of single-family homes.

Over the past three years, the collapse in the housing market led to soaring loan losses, a severe banking system crisis and the longest recession since World War II.

Even with the better-than-expected figures, analysts don't expect a quick rebound in housing. That's because the economy is still shedding jobs and home prices are falling, making people hesitant to commit to buying a new home.

The National Association of Home Builders on Thursday said its housing market index rose two points to 17 this month, the highest level in nearly a year. Readings below 50 indicate negative sentiment about the market. The last time it was above 50 was April 2006.

While housing normally leads the economy out of a recession, a glut of unsold homes and a record wave of mortgage foreclosures are expected to temper demand.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend