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Bill Freehling is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Bill Freehling.
Housing construction picks up in U.S., locally
There are also signs that home construction is picking up in the Fredericksburg area, though it remains far from levels seen during the boom.
Local builders say most of the new activity has been occurring in Stafford County, where several large new residential projects including Embrey Mill and Colonial Forge are under way, and more developments are planned. In Spotsylvania County, site work is now under way for the Tricord Cos.’ Mallard Landing townhouse development.
The Commerce Department said Wednesday that builders broke ground on homes at a seasonally adjusted annual rate of 872,000 in September. That’s an increase of 15 percent from the August level.
Applications for building permits, a good sign of future construction, jumped nearly 12 percent to an annual rate of 894,000, also the highest since July 2008.
The strength in September came from both single-family construction, which rose 11 percent, and apartments, which increased 25.1 percent.
In Stafford there were 46 building permits issued for single-family homes in September, compared with 42 in September 2011, according to county data. Year-to-date through the end of September, there had been 27 percent more single-family building permits issued in Stafford compared with 2011. Multi-family permits have more than doubled year-to-date in the county, and certificates of occupancy are also up.
Nationwide, construction activity is now 82.5 percent higher than the recession low hit in April 2009. Activity is still well below the roughly 1.5 million rate that is consistent with healthier markets.
Still, the surge in construction suggests builders believe the housing rebound is durable.
Builder confidence reached at a six-year high this month, according to a survey by the National Association of Home Builders. The group’s index of builder sentiment rose to a reading of 41. While that’s still below the level of 50 that signals a healthy market, it has steadily climbed over the past year from a reading of 17.
Sales of new and previously owned homes have been slowly improving this year, and home prices are starting to show consistent gains. In the Fredericksburg area, median housing prices have gone up year-over-year every month since February.
Record-low mortgage have encouraged more people to buy. And the Federal Reserve’s aggressive policies could push long-term interest rates even lower, making home-buying affordable for the foreseeable future.
Housing is expected to keep improving next year. But many economists say economic growth will stay muted until companies step up hiring and consumers start spending more.
Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the home builders group.
-The Associated Press contributed to this article.