The real estate sector still looks promising. While fewer homes are built this May, the tempo of construction continues to be significantly higher compared last year ago representing a stronger job market in the real estate sector.
The government itself is not worried. According to the Commerce Department, housing starts last month decreased by as much as 11.1 percent while house sales increased twice as much at 22 percent hence the decline in house starts is expected, as reported by Floridarealtors.
The monthly decrease in the rate of apartment construction can largely be attributed to less house starts in May. Overall however, housing starts still showed a strong increase of 6 percent this year, which is a spillover result of stronger job growth and relatively low mortgage rates. More Americans have the income to buy houses at the average price of $300,000. This accounted for the 24 percent increase in the sale of new homes.
More Americans are also renting. Cox reports that a think tank organization, Urban Institute estimated that more households will be renting by 2030 than having their own homes.
In line with this, approved building permits have climbed by as much as 11.8 percent, the highest level since 2007 as construction companies set on building more houses and apartment complexes to satisfy the growing housing demand. This is especially to fill up the current 4.8 months of supply which should ideally be six month's worth.
Moreover, the National Association of Home Builders/Wells Fargo builder sentiment index also increased by five points from 54 to 59 this month, which means that many construction companies see a positive outlook on housing sales.
In line with this, mortgage rates are beginning to go up by around 3.8 percent according to the mortgage firm Freddie Mac.
With all things falling to their places, the US realty sector strongly shows a solid outlook this year.
