Real success in the nation’s construction industry is tied significantly to job growth. Fewer employed people means fewer homes purchased. Those two factors continue to show some promise but a surge in activity is missing for the nation’s economic recovery.
A trade industry’s index of builder sentiment was reported to be the highest since May of 2010 but it still remains far below the boom days of 2006. A surge in permits of late suggests the housing industry may be moving upward after nearly five years of troubled times.
The Associated Press reports economists now say 2011 will be the first year since the Great Recession began in 2007 that home construction will have helped the economy grow. Before this year, the industry endured two of the worst years ever.
The nation’s builders broke ground on a seasonally adjusted annual rate of 685,000 homes in November, a 9.3 percent jump from October, the government said. It’s the highest level since April 2010.
A healthy housing market involves construction of about 1.2 million homes a year. Single family home construction, which accounts for 70 percent of homebuilding is up 2.3 percent but apartment construction is booming.
Multi-family apartment construction rose 32 percent to a rate of 238,000 units. Last year, builders began work on roughly 587,000 homes. That barely surpassed the 554,000 homes started in 2009, the worst year ever.
Each home built represents roughly three jobs for the year through private contractors, materials and spin-off purchases.
If interest rates continue to stay low, builders could begin to enjoy better times.