June better than expected for new-home construction
July 25th, 2011 by
Last week, the U.S. Commerce Department reported June marked a five-month high for new-home construction, leading some economists to believe the housing market may be in the beginning stages of a turnaround.
About 629,000 new home projects were started in June, which is an increase of 15 percent from May and 17 percent higher than June 2010. All regions of the country posted increases in new-home construction.
Cezary Podkul of the Washington Post spoke with Brian Wesbury, chief economist at First Trust in Illinois:
“…The postive June figures mark ‘the beginning of a recovery in housing’ that ‘will last for many years into the future,’ said Wesbury …The key reason for optimism, Wesbury said, is that June was the first month since January 2006 that saw an increase in the total number of homes under construction, meaning more new homes were being started than being completed.”
This is good news on a broader scale, as well. Robert Denk, senior economist at the National Association of Home Builders, estimates each new home creates three new jobs, which is why the housing market should play a central role in the U.S. economic recovery.
If new-home construction continues to increase, perhaps that recovery will come sooner than some think.