Applications for building permits and initial construction of U.S. housing properties both surged in the month of June, 2009. According to the US government’s Commerce Department figures, it’s getting an adjusted annual rate of 582,000, which is 3.6% up from a revised 562,000 in May. Economists were expecting that housing construction will increase to a rate of 524,000 units per annum.
Since December 2004, Single-family housing construction was notably strong; it goes up 14.4% on a month-over-month basis. It was the biggest surge & considered the center of the housing market.
According to Mike Larson, real estate and interest rate analyst at Weiss Research, the downfall of housing market is gradually stabilizing. He added in a research report “The new home industry has done a good job of reducing supply, but the existing home market is still vastly oversupplied, and we continue to be inundated with an influx of distressed and foreclosed properties."
It is well known that applications which are submitted for building permits are an indicator of future construction activity. It was noticed that the number of those applications rose 8.7% to an amazingly adjusted annual rate of 563,000 in June, 2009. Since December 2008, it was more than the annual rate of 530,000 that experts had forecast & the highest number of applications till 2nd qtr of 2009.
June-2009 holds the second mark of the month when home market have increased after the rate( per annum) of new homes having ground fell to an all-time low of 454,000 units in April, 2009.
New housing construction activity was getting stronger in the Midwest, where the construction activities were up by 33.3% from the previous month. It was also increased in Northeast by 28.6% in June.
But the in the West and the South, declines in the number of new homes are getting down last month ,14.8% in the West and 1.4% in the South.
