US Housing Starts Continues Increase - Hits 2008 Levels

The U.S. housing starts rose more than most economists expected in January. The rise was caused by a surge in new rental property boosting hopes the housing sector could help economic growth this year.

The Commerce Department reported on Thursday that housing starts climbed 1.5 percent to an annual rate of 699,000 units.

Starts of multi-unit buildings, which are often rented, jumped 8.5 percent last month. New construction on buildings with five units or more increased 14.4 percent.

Groundbreaking on single-family units, which make up a much larger portion of the sector, fell 1.0 percent. This might appear as bad news, but in actuality it is positive news because the current inventory of single family homes continues to steadily drop. In Houston for January the number of sales actually increased in 2011 compared to 2010, and the inventory significantly dropped. The average price of single family home increased just below 1%. All this data continues to show that the housing market is improving and investors and some home owners realize that prices and loan rates are at all time lows.

U.S. Housing Starts

While housing starts are still increadibly low when compared to 2006 (2.2 million) we must remember that during the housing boom builders were flooding the market. We do not want to witness those insane levels again until the population increases substantially.