The rate of housing starts rose to its highest level since 2008 during September, while other indicators of new construction were also positive, according to a property data report from the Department of Commerce.
In September, housing starts rose to a seasonally-adjusted annual rate of 872,000, which was 15 percent higher than the previous month's rate of 758,000. This was also an increase of more than 34 percent compared to the same month in 2011, when the figure was 647,000. When examining single-family property starts specifically, the rate rose 11 percent to 603,000, from the previous month's 543,000.
"It's no longer a question of whether the industry is rebounding," said Larry Sorsby, chief financial officer of construction company Hovnanian Enterprises. "There is clear evidence that we have bounced off the bottom and are in the midst of a recovery."
Permits, completions strengthen last month
Building permits also had marked improvements in September, as the total number of permits authorized increased more than 11 percent to a rate of 894,000, according to the government report. August's rate totaled 801,000, while the latest figure was also more than 45 percent higher than the same level one year earlier, with a total estimate of 616,000. Permits for single-family homes also experienced a jump of nearly 7 percent compared to August's figure.
The rate of completed homes rose to approximately 683,000 in September, 0.4 percent higher than the previous month's figure of 680,000, the report noted. This was also nearly 14 percent higher than the figure observed in September 2011. Continued inventory additions may help improve the market's supply, as it was filled with foreclosed houses since the recession.
According to the National Association of Realtors, some parts of the country have dealt with a lack of inventory, and this has complicated home sales. Specifically, the association's Pending Home Sales Index for August showed that the West region had a sales decline of more than 7 percent.
Despite the bump in the road, there should be a national increase in existing-home sales of approximately 9 percent this year, NAR explained. Additionally, the median home price could jump by as much as 5 percent by year-end, as well as in 2013.