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The Real Estate Bloggers

The Real Estate Bloggers

Home Starts Surge on Rental Construction Demand

Posted: 16 Apr 2013 06:54 AM PDT

Home builders are thrilled today on reports that demand for new construction improved significantly during the month of March. While any increase is great news for the battered construction industry, this news may fortell an economic future that real estate agents may not be as excited about.

The demand is much greater right now for rental and multiunits properties than traditional single family homes. This indicates the rebound in home ownership may not be happening as much as the investors are reading the tea leaves and trying to lock in quality, new construction investment properties going forward.

Either way, for the contruction industry this is great news. People are being put back to work and suppliers are ramping up their inventories. New construction is a large driver in the overall economy and however it is occurring is a good thing for the United States.

Starts climbed 7 percent to a 1.04 million annual rate, the most since June 2008, after a revised 968,000 pace in February that was larger than previously reported, Commerce Department figures showed today in Washington. The median estimate of 80 economists surveyed by Bloomberg called for 930,000. Building permits, a proxy for future construction, fell.
Builders are rushing to satisfy growing demand for rental units, propelling the jump in construction that will help support economic growth. Work began on fewer single-family houses last month, adding to evidence that part of the market is pausing.
"Whether it's driven by demand from homebuyers or renters, it doesn't really matter because it's roofs over peoples' heads," said Aneta Markowska, chief U.S. economist at Societe Generale in New York, who had the highest starts forecast in the Bloomberg survey. "There's still a lot of room for improvement in housing, both for activity and for prices. This is critical for the U.S. economy." via Bloomberg


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