The latest figures from the US Census Bureau show that new home construction has jumped significantly in recent months, leading to optimism that the housing market may be improving. The new construction figures come alongside a decline in existing homes sales, which may indicate that the market may be stabilizing after several years of stagnation.
New home construction rose 11.1% year-on-year in March, the highest level since November 2017. Private ground-breaking rose 4.7%, while ground-breaking for buildings with five or more units rose an impressive 40%. This increase in construction may be a signal that developers are confident demand for housing will continue to grow.
The rise in new home construction also suggests that the housing market may be recovering from a period of stagnation. Home sales have been flat for some time, with sales of existing homes down 1.2% year-on-year in March. This lack of activity was one of the factors hurting the market, but the latest figures show that developers are now willing to invest in creating new homes.
The increase in new home construction is also likely to benefit the economy in general. Since construction is labor-intensive, this activity can create jobs and boost economic growth. Other industries that benefit from increased home construction include furniture and appliances, which both depend on new home construction for sales.
Overall, the increase in new home construction is a welcome change in the housing market, and suggests that the market may now be on the road to recovery.
