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Construction picks up in August

September 22, 2010 - In a possible sign that more people will be moving into new homes, government data reported that new construction rose across the board last month.

The Commerce Department reported rising figures for a number of significant building indicators during August. Building permits for private-owned housing units rose 1.8 percent to a seasonally adjusted annual rate of 569,000 from July's rate of 559,000. That figure was still 6.7 percent below the number of permits that were issued in August 2009.

Additionally, building contractors started construction on 598,000 private-owned units in August, 10.5 percent above the revised July estimate of 541,000 and 2.2 percent above the rate posted a year earlier. Single-family housing starts were also up 4.3 percent over the previous month's totals.

Roughly 603,000 privately-owned units finished construction last month, 5.6 percent more than reached completion in July. Single-family housing completions also rose 1.3 percent on a month-by-month basis, giving relocating families more homes to choose from for their move.

Yet even given positive construction growth, experts told the Los Angeles Times that the new units would only add to an already stacked home inventory. New homes will continue to have competition from discounted distressed properties, which still appear to be favored among relocating families. Campbell Surveys reported that more homebuyers are moving into distressed properties because of lower prices.
 

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