New Home Construction Surges

Most national and local experts agree that the real estate market has turned a corner and is starting to trend upwards. Indicating that a bottom has been reached. The following is an interesting piece I read recently on CNNMoney.com.

CNNMoney.com – September 21, 2010

New home construction surged to the highest level in four months in August, a government report showed Tuesday.

Housing starts, or the number of new homes being built, jumped 10.5% to a seasonally adjusted annual rate of 598,000 in August from a revised 541,000 in July, the Commerce Department said.

Economists were expecting a rate of 550,000 housing starts, according to a consensus estimate from Briefing.com.

The number of new homes being built in August was up 2.2% from a year ago.

“This is a step in the right direction, but you have to remember that we’re still hovering around all-time lows,” said Kevin Smith, a senior vice president at Chapdelaine Credit Partners. “It’s clear that we’re far from being out of the woods.”

Despite the monthly rise, it’s too early to look at this as a positive trend for the housing market until more jobs are created, he said.

“People who don’t have jobs aren’t buying homes,” Smith said. “You have to have job creation to see housing improve, and people need to actually have the confidence that they are going to keep that job for a year or two.”

Read the full article at CNNMoney.com