Construction began on 658,000 residential housing units nationwide in September – 15 percent more than in August and 10.2 percent more than the 597,000 new homes started in September 2010.
That’s the fastest pace in 17 months, according to the U.S. Department of Housing and Urban Development.
However, apartment construction fueled much of the increase, which creates jobs and boosts the economy but doesn’t mean recovery for the sluggish housing market, according to the Associated Press.
Residential building within the city of Boulder reflects the national trend in which single-family home construction remains inhibited while builders are moving forward with multifamily housing projects.
This year, the city of Boulder has issued 28 single-family home permits and 10 attached-dwelling (duplex) permits, but has approved construction of 480 multifamily units, with less than three months of the year left. Comparatively, the city issued 60 single-family permits, 48 attached-unit permits and permits for 344 multifamily units in 2010.
Economists say the number of housing starts nationwide is about half of the 1.2 million needed to consider the housing market healthy, according to AP.
Single-family home construction represents nearly 70 percent of homes built, but the 425,000 starts in that market was only a slight increase – 1.7 percent – over August starts. The issuance of building permits overall fell to a five-month low, dropping 5 percent, according to the federal government.
“The overall result is favorable,” Pierre Ellis, an analyst at Decision Economics, tells AP. “But greater optimism would have been prompted if single-family starts had increased — suggesting that builders were seeing a better market ahead.”
AP reports that the spike in apartment construction increased residential building to its best pace since April 2010, when a federal home buyers’ tax credit temporarily boosted construction. Apartment building in September surged 53.4 percent to its highest level in three years.
Increased apartment construction may signal that builders are gaining access to hard-to-get financing for projects – which is a positive economic indicator, according to AP.
While home construction represents a small portion of the housing market, the National Association of Home Builders says each home built creates an average of three jobs for a year and about $90,000 in taxes, AP reports.