New Home Development At Highest Rate In Four Years

US homes are being built at their fastest pace in four years according to September numbers released by the Commerce Department. If housing numbers continue, it could be one of the biggest signs to date that the economic recovery is gaining traction.

According to the Commerce Department, new housing starts increased by 15 percent in September to a seasonally adjusted annual rate of 872,000 units. Based on those numbers, housing development increases were on track for their quickest pace since July 2008.

It should be noted that housing information is often subject to substantial revisions.

Also gaining additional traction were August numbers, which were revised from 750,000 to 758,000 home starts.

While numbers have increased, they are still only 40 percent of their peak, which occurred in January 2006.

In a poll conducted by Reuters, analysts had predicted that residential construction would increase to a more modest 770,000 new home starts.

The report also found that single-family homes, the largest home market segment, increased by 11 percent to 603,000, the highest level since August 2008. Multi-family homes rose 25.1 percent.

September also witnessed an 11.6 percent increase in building permits in the month of September with 894,000 requests made. August permit numbers were revised to 801,000 units, 9,000 units below analyst expectations.

With new home being developed and home mortgage rates still hovering near all-time lows the hope for many developers is that potential home buyers will jump back into the market when more inventory is made available to them.

In August, pending home sale figures also reached a new 4-year high point, yet again signalling a potential recovery in the housing market.