The U.S home construction industry was finally able to recover last July when builders made more projects than any given time for the last eight years.
According to afr.com [Australian Financial Review], Commerce Department in Washington showed that the annualized rate in the residential housing rose to $1.21 million from $1.2 million. Though it was only a 0.2 percent gain, it's still an improvement which is brought by the single- family houses.
Housing industry is back on its track and now recovering from recession with its improving job market and increasing housing formations. This progress is most likely to continue until 2016 despite of possible increase in interest rates.
Eric Green, head of US Economic Research at TD Securities in New York, said that "Housing is in a real sweet spot, moving higher but not dangerously so. The housing market will be strengthening over the second half. The Fed raising rates will not change that."
According to smh.com [Sydney Morning Herald], the housing now exceeds the median forecast surveyed by Bloomberg that projected $1.18 million in the annualized rate. However, permits, that serves as a proxy for future construction, dropped to $1.12 million from 1.34 million annualized rate last June.
Bloomberg Intelligence economists Joah Wright and Carl Riccadonna said in a research note that "It is too soon to judge permits in light of the volatility associated with the New York City tax break, but the fact their three-month moving average held steady is a consolation."
The increase in rates that started last month was due to the 12.8 percent gain in single- family houses' construction which made the rate rose to 782,000, the most since December 2007.
However, condominiums, apartments and multifamily homes dropped with a 17% in its annual rate which took it down to 424,000.
In long- term, housing demand may go up again as new generation of young adults will begin purchasing entry- level properties.
