Data released by the US Department of Commerce has revealed that new home construction has surged in September, growing at its fastest in four years. Housing starts were up 15 percent from August, with a seasonably adjusted annual rate of 872,000.
The figure is well above analysts’ expectations of 765,000 new units starting construction. Building permits, an indicator for future construction, was also on the up, rising 11.6 percent in September from the month before; a 45.1 percent year-on-year increase from 2011.
Major banks in the US have been hailing a housing market construction. “Importantly, we believe the housing market has turned the corner,” Jamie Dimon, CEO of JP Morgan Chase, said last week.
Though housing starts figures are prone to frequent revisions and overstating, other market research seems to corroborate the data. This week the National Association of Home Builders/ Wells Fargo housing market index was up for the sixth month in a row to 41, the highest recorded reading since mid-2006. The index, which is out of 100, with readings under 50 pointing to poor conditions, and though results were still only at 40 percent of their peak in January 2006, the readings are increasing.
The Department of Commerce figures come soon after the release of positive jobs figures for September, when unemployment dropped by 114,000, from 8.1 percent to 7.8 percent. The two figures signal signs of modest recovery for the US economy.