A Commerce Department report released the last week is showing that housing ‘starts’ climbed in July. Experts opine that it may be a result of a rebound in construction of multifamily projects. There has also been an increase in builder permits that shows that the construction sector will see a lot of expansion in the months to come.
Some estimates reveal that home sales probably increased in July to the highest level which according to them is the highest in more than three years. The data shows that combined purchases of existing and new homes climbed to a 5.64 million annualized pace last month which according to analysts is the fastest clip since November 2009.
Increased Construction Applications
According to some analysts a Conference Board report on August 22 will show which direction the construction sector is moving to. An increase in construction applications is one reason economists feel the world’s largest economy will see growth in the coming years. Additionally, the index of leading economic indicators which provides an outlook for the next three to six months showed 0.5 percent growth in July.
Now, everyone seems to be waiting for the release of the minutes of the Federal Reserve’s July 30-31 meeting, as it is expected to tell a lot of things or clues on when the Federal Bank plans to trim the $85 billion in monthly asset purchases. A hopeful crowd of economists feel that the housing recovery is to continue as the fundamentals of the market are strong to overcome higher mortgage rates.
There has been a lot of improvement in sales despite a rise in borrowing costs. Estimates tell that a limited supply of homes is helping boost home values and builder confidence; it is expected to continue in the coming weeks and months. Economists believe that gains in the housing and auto markets will help lift the national economy to the growth path.
It is almost eight years now since November 2005 that homebuilder confidence climbed in August this year, as supply constraints and rising prices are helping boost the outlook for builder revenue. Additionally, estimates are that sales will increase on an average of 37% among 10 U.S. homebuilders whose third quarter’s end September 30.
Contrary to reports in several media organizations, a Reuters’ report says that U.S. consumer sentiment ebbed in August and residential construction rose less than expected last month.
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