Once silent, construction tools are beginning to be heard across the nation once again as home construction spending leapt forward in November 2011. The US Commerce Department has reported construction projects are expanding their budgets with spending having risen by 1.2% in November, the largest since a peak of 2.2% in August.
While economic analysts say a return to healthy pre-recession levels is still a ways off (4 years), Novembers statistics show the nation shouldn’t be fearful of optimism. Single family construction (+1.5%) and multi-family construction (+1.3%), pushed private residential construction to an overall 2% increase totaling a seasonally adjusted $522.3 billion dollars.
November groundbreaking on new homes was tagged at a seasonally adjusted annual rate of 685,000. (+9.3%), putting it at the fast pace of growth since April 2010. To keep pace with growth, builders will need to aim for a minimum of 600,000 new homes for 2012.
According to the National Association of Home Builders, new home construction accounts for only a small portion of the housing market (only about 1.5%) but surprisingly maintain a disproportionate influence on the economy. An average of three new jobs are formed per unit with each home producing around $90K in state taxes.
Although the housing construction market has a long way to go, this solid foundation is certainly leading towards a day when the sounds of saw, hammer and shovel will be heard in a neighborhood near you.
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