New housing construction rose in August, boosted by the strongest pace of single-family home starts in more than two years. Per the Commerce Department in Washington, construction of single-family houses climbed 5.5 percent to a 535,000 rate, the fastest since April 2010. Permits for the building of one-family homes increased 0.2 percent to a 512,000 annual pace, the highest since March 2010.
Confidence among construction company leaders is the highest in more than six years. The National Association of Home Builders/Wells Fargo index of builder confidence jumped in September to 40, the strongest since June 2006, from 37 a month earlier, group said yesterday.
“The housing recovery is being driven by pent-up demand, very low interest rates and attractively priced homes,” Chief Executive Officer Douglas Yearley Jr. of Toll Brothers said on an Aug. 22 conference call with investors. “With an industry wide shortage of inventory in many markets, we are enjoying some pricing power.”
Mortgage rates near all-time lows and cheaper properties are driving sales and propelling construction. The average rate on a 30-year fixed mortgage held at 3.55 percent in the week ended Sept. 13, near the 3.49 percent on July 26 that was the lowest in data dating to 1971, according to McLean, Virginia-based Freddie Mac.
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