U.S. Builders are betting that the housing market is finally on the path back to health and strength. Builders requested five percent more permits in February to build single-family homes and apartments this coming year.
While most economists still consider the market to be ‘half healthy,’ it is the highest rate seen since October 2008, with 717,000 permits represented the current annual rate.
Builders say they feel more confident lately with what they note as a growing interest from people about building homes.
The increase in permits suggests increased sales over the next 12 months – which is the typical length of time it takes to build a single-family home. The government said builders broke ground on fewer homes in February than in January, at 698,000 down from 706,000. January’s ground breaking rate was the highest seen since October 2008.
Despite the lowered number, economists say what’s most important about this recent data is that the numbers of requested permits has increased, a sign of more confidence and trust in the market from builders.
Economists project 745,000 homes will begin construction this year, up from last year’s 611,000. It is estimated that two-thirds of those builds will be apartments and condominiums, representing a pent-up demand from young adults who have been stuck living with their parents throughout the housing market lull.