New home construction has proven in the past to be a key factor in the health of an economy, and the same is true for the current economic recovery the U.S. is now experiencing. The good news is that, both the Birmingham real estate market and the U.S. housing market are seeing an increase in home sales, home prices, and home construction.
The Census Bureau’s report from last Thursday showed that the U.S. had a 6.8% rise in building permits to an annual rate of 812,00 in July. That is the highest rate the country has seen in nearly four years, along with being 29.5% higher than July of last year. This number was higher than expected, as a consensus of housing industry experts had forecasted the building permit rate to be about 750,000 for the month of July. This is a positive sign for those prospective home buyers who are considering purchasing a new home in a new home community such as Ross Bridge in Birmingham.
An increase in building permits is a big indicator that builder confidence is growing stronger.
According to David Crowe, chief economist for the National Association of Home Builders, a rise in permits is also a likely sign that there will be job growth. Crowe estimates that there are about three jobs created for each new home built and that a rise in applications for building permits is a good indicator of which direction the housing market is heading. “If you’re looking into the future, permits are a truer picture of the market,” he said. An increase in construction of new homes Birmingham, is likely builders’ response to a higher demand for new homes caused by a decrease in inventory that many regions have been experiencing over the past couple of months.