US Apartment Construction Hits 25-Year High
H4E News: Apartment construction in July hit a 25-year
high, fueling the month’s pickup in housing while single-family home
construction increased modestly. U.S. home construction, typically volatile
month to month, increased 15.7 percent last month, the fastest pace since
November after declines of 4 percent in June and 7.4 percent in May, the
Commerce Department said on 19th
August 2014.
And while
single-family building permits increased just 0.8 percent in July versus the
year-earlier period, apartment permits increased 17.5 percent over the same
period, according to Commerce
Department data.
The surge in
apartment construction fuels less economic growth nationally than a comparable
rise in single-family homes because single-family housing multiplies consumer
spending and job growth more, according
to Diane Swonk,
Chief Economist of Mesirow Financial.
“We tend to see more employment and spillover spending
from owner than renters, but it is still a move in the right direction,” she
blogged on 19th August 2014.
Home owners tend to buy more furniture and home
improvement products than apartment renters, for example. So the overall
gain in construction, a sector the Federal Reserve keeps a close eye on as an
indicator of the economy’s health, will impact spending, production and
employment less than in the past.
The apartment surge
is still a positive sign for job growth, but economists hope more renters will
save enough for down payments or qualify for mortgages to buy homes.
No comments:
Post a Comment