Home construction starts rise. Another sign of a recovery?

Filed in archive mortgage news on July 17, 2009

Is the long housing slump nearing an end? I suppose that depends on whom you ask. But there are a growing number of signs that, while things definitely still are not rosy in the housing industry, we may have reached the bottom of the market. Hitting bottom is good; Once a market has done that, it can finally start moving up again.

The latest evidence that the housing market is finally starting to recover came this week. Housing starts in the country rose in June. And not only did they rise, they jumped rather significantly.

Construction of single-family homes in June increased by the most since 2004. In fact, the 3.6-percent increase in housing starts bring the number of new homes under construction to an annual rate of 582,000. That's the highest this figure has been since November.

Of course, this doesn't mean that all is well in the housing world. A recovery may have started, but it's certainly not going to be a quick one. And the recovery we're seeing now is still rather fragile.

What has to happen for a strong, steady recovery? For one thing, we need to see unemployment fall. Unfortunately, that's not happening. The nation's unemployment rate is now higher than 9.4 percent. When people are out of jobs, they're not going to go house shopping.

It took a long time for us to reach the meltdown point in the U.S. housing market. Expect it to take a long time for us to dig our way out of it, too.