In yet another positive economic indicator, the Census Bureau released new data on Wednesday showing energizing news for the housing market.
The housing recovery surged in September, fueled by a rate of home building at its highest point since 2008. Housing starts in the U.S. grew by 15 percent from last month as 872,000 homes began construction. Additionally, building permits for privately-owned houses swelled by 11.6 percent relative to August, at an annual rate of 894,000.
Mortgage rates are now at record lows, and with the third round of quantitative easing (QE3) announced by the Federal Reserve last month — a plan to buy $40 billion in mortgage-backed securities each month indefinitely — rates will likely remain low in the near future.
The latest report from the Department of Commerce is a boon to the labor market, which will likely see construction jobs slowly tick back to pre-recession numbers. Construction employment suffered particularly as a result of the housing bubble that popped in 2007.
Last week, JPMorgan Chief Executive Officer Jamie Dimon released a statement expressing newfound confidence in the recovery.
“Importantly, we believe the housing market has turned the corner,” he said. “In our Mortgage Banking business, we were encouraged that credit trends continued to modestly improve.”
Prior to the housing report, U.S. banks were already benefiting from the recovery. The Wall Street Journal wrote, “The recent pickup in home prices and the growing sense that housing has finally bounced off a bottom should increase lending activity.”
Given the huge contribution of real estate to the gross domestic product—as much as 18 percent—a stabilizing housing market has the potential to have significant effect on jobs and the economy.
The strong housing numbers are just the latest recent piece of good economic news; in October alone, unemployment fell to 7.8 percent, jobless claims dropped to their lowest level in four years, and consumer confidence rose to a five year high.
Copyright 2012 The National Memo