The Commerce Department reported that few existing homes are listed for sale, creating the incentive for developers to grow through building.
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The National Association of Home Builders’ index was 58 for the fourth month in a row. On Tuesday, May 17, 2016, the Commerce Department reports on US home construction in April. New-home sales are significantly below the half-century average of more than 650,000 a year. “Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward”, he said in a release.
Combined single- and multifamily starts were mixed in April, rising 22.2% in the Midwest and 14.1% in the South.
Builders’ view of sales over the next six months rose three points to 65, the highest reading since December. Chief economist Robert Dietz commented that the strength in current sales was an indication of builders’ confidence in the markets strength.
Permits to build new houses climbed 3.6 percent to an annual rate of 1.12 million.
A gauge of home-builder sentiment was unchanged in May, a sign of steady growth for the housing market.
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The new-home market still has a long way to go to recover from the housing crash of nearly a decade ago. During the eight years of recovery, the composite index fell to a low of 9 in December 2008. Home construction remains well below its annual pace of roughly 1.5 million during the 1990s, a reflection of both higher housing costs and the damaged financial credit that remains more than 6 ½ years after the recession officially ended.
