For a while now the US housing market has seemed unstoppable in its path of recovery, but still the doubters have their doubts and with good reason, there are a lot of factors to make the future uncertain. The US housing market was completely gutted of course things can go wrong while it puts itself back together.
One thing that needs to come back to normal is the house building industry, which has been devastated by the crisis. Unfortunately weak building figures is potential a factor in supporting the recent price growth, so once building starts coming back up a new balance will need to come to the market. However, few could say that building at its current level is healthy, no matter whether it is holding up prices or not. Thank fully the latest data shows that building is getting back on its feet.
According to last week's data from the U.S. Commerce Department new home starts rose to the highest level since 2008 as solid gains in both single-family and multifamily housing production resulted in a nationwide 12.1 percent rise in housing starts to a seasonally adjusted annual rate of 954,000 units in December.
Single-family housing starts rose 8.1 percent to a seasonally adjusted annual rate of 616,000 units in December, while multifamily production jumped 23.1 percent, to 338,000 units. What's more the rise in production happened across all regions; the North-east posted a gain of 21.4 percent, the Midwest was up 24.7 percent, the South posted a 3.8 percent increase and the West was up 18.7 percent.
"Builders have become increasingly optimistic about conditions in local housing markets in recent months and this report underscores that the housing recovery is well on its way," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "With inventories of new homes at razor thin levels, builders are moving prudently to break ground on new construction ahead of the spring buying season to meet increasing demand."
"Overall, this report represents a solid ending to 2012 and a promising start to 2013," said NAHB senior economist Robert Denk. "Multifamily production is almost back to normal levels and while single-family starts still have a way to go, they are gaining momentum.
This trend could be even stronger if not for persistently tight credit conditions for home buyers, flawed appraisal values and uncertainties regarding economic policy debates in Washington."