The fastest pace of single-family home in more than two years led the U.S. builders start work on more home construction in August The increase points to steady progress in the housing recovery.
The Commerce Department said Wednesday that construction of homes and apartments rose 2.3 percent to a seasonally adjusted annual rate of 750,000 last month. That's up from 733,000 in July, which was revised lower from last month's initial estimate.
Apartment construction, which can be volatile from month to month, fell 4.9 percent. Single-family housing starts rose 5.5 percent to an annual rate of 535,000 homes, the best pace since April 2010.
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Still down from a four-year high of 811,000 in July, which was revised higher applications for building permits fell to an annual rate of 803,000.
The rate of home construction has risen nearly 60 percent since hitting a recession low of 478,000 in April 2009. It's still half the pace considered healthy. But the steady gains suggest the housing recovery could endure.
With an uneven start in housing gains in August , a sharp 20.7 percent increase in new construction of homes and apartments in the Midwest, 3.7 percent in the South, it fell 12.6 percent in the Northeast and 4.3 percent in the West.
Confidence among builders rose in September to the highest level in more than six years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo. And builders are more confident that sales will improve over the next six months, the survey noted.
Even with the gains, the housing market remains weak. Many would-be buyers are having difficulty qualifying for loans or can't afford the larger down payments being required by banks.
Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the NAHB's data.
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The Federal Reserve last week announced new stimulus measures intended to keep mortgage rates low for the next few years.
KB Home(NYSE:KBH) jumped 4% to $13.20, The Ryland Group, Inc.(NYSE:RYL) added 5.55%, Hovnanian Enterprises, Inc.(NYSE:HOV) surged 3%, Lennar Corporation(NYSE:LEN) climbed 3%, D.R. Horton, Inc.(NYSE:DHI) surged 4.50% and Beazer Homes USA, Inc.(NYSE:BZH) soared 7%.