Another bit of good news for the US housing market this summer – permits for new construction are on the rise. New home construction is a big indicator of economic recovery, so this is a positive sign that the market is picking up.
According to reports conducted by the US Census Bureau, in July the annual rate of new permits issued reached 812,000. This is the highest rate in the last four years, and represents at 6.8 percent rise. Compared to the same time last year, July 2011, that number is up a healthy 29.5 percent.
This number came in quite a bit higher than expected. Industry experts thought that the rate of new permits issued would not exceed 750,000.
The number of new housing projects starting in July declined by 1.1 percent, but increased from this time last year by 21.5 percent.
The trend for new home construction, and the rise in the related building permits required to begin construction, is welcome news after the slump the US has experienced over the last several years. Confidence is starting to rise among builders, albeit slowly. Nonetheless, experts believe that these permits are an indicator that the market is heading in the right direction.
Could this be the catalyst to an overall improvement in the economy? While experts remain cautious, they are optimistic that we’re inching our way to a turnaround.
New home construction is an industry that is highly physical and labor-intensive. It has always been a source of good-paying jobs for many blue collar workers. These same workers have felt the pinch in the last few years, and have frequently been out of work, sometimes for long periods, since the market crashed.
Home construction provides employment for a legion of workers. This includes tradesman who work on-site such as masons, carpenters, and plumbers. It also provides continuing employment for those people who make the materials they use, including factory workers who manufacture building materials, home appliances, home furnishings and other types of goods found in and around a home. It is estimated that for every new home built in America, three jobs are created.
While experts remain cautiously optimistic, these increases in the number of new building permits issued could be just what our economy needs to kickstart. The hope is we’ll begin reaping the benefits of these permits in the coming months, and that this influx of new construction will help to repair our nation’s flagging economy.