After a weak 2015 first quarter, there are indications that the U.S. housing market is helping the economy gain momentum after reaching its highest level of activity in nearly seven and a half years. A report from CNBC.com states that the applications for permits related to housing increased, a clear sign of a growing and robust market still burgeoning with promise.
Moreover, GlobeandMail.com reports that groundbreaking projects increased by 20.2 percent or a seasonally adjusted rate of 1.14 million units for 2015. This is the highest number of units built since 2007, according to the Department of Commerce, and the highest rate overall since February 1991.
Meanwhile, applications for permits for home construction increased by 10.1 percent to a 1.14 million unit rate, the highest since June 2008. Since July, permits have been over the 1 million unit rate, which shows the robust market with new applications for home building increasing since the second quarter of last year.
In April, much of the groundbreaking was in the Northeast, 85.9 percent, with gains in both the Midwest and the West. Meanwhile, the South had 1.8 percent growth. This was where much of the construction of new homes was done, which was signified by an increase of 9.9% in building permit applications, as reported by reuters.com.
The tremendous numbers put up by the housing market is a stark contrast to the sluggish numbers of business spending, consumption and manufacturing markets. The weakness of such markets has reportedly forced economists to recalculate their second quarter growth projections. Also, if the low performance of the markets continue, CNBC reports it would be highly doubtful that the Federal Reserve will raise interest rates before the end of the year.
The U.S. government previously reported a growth of 0.2 percent of the GDP in the first quarter, but the numbers for March showed otherwise. The trade and inventories data showed a decline, leading to a contraction in the overall numbers.
