Wednesday, March 21, 2012

Multi-Family Leads Rise in New Housing Permits

Permits to build new homes including modular housing closed in on the highest level in more than three years in February, a sign that the housing market is slowly healing from the worst collapse since the Great Depression.  New building permits surged 5.1 percent to a seasonally adjusted annual rate of 717,000 units last month, the Commerce Department said Tuesday. 

The pickup in permits is a signal that builders are seeing stronger demand though much of the new construction is geared toward multifamily housing, which jumped 21 percent last month as strong demand continues to push rents higher.  Modular housing should expect to pull in about 30,000 units this year and that number could go higher as more modular factories actively begin to go after the commercial and multi-family markets.

Single-family home construction faces a major headwind as the backlog of unsold existing homes continues to weigh on prices. Housing starts last month fell by 1.1 percent, depressed by a 9.9 percent drop in single-family homebuilding.
Despite the steady gains, the homebuilding industry still has a long road back to the boom years, when starts peaked an annual rate of 2.3 million units. Falling home prices in many parts of the country have discouraged some would-be home buyers.

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