Experts Weigh in on Surge in New Housing Starts

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Construction on new houses rose faster than expected in January and reached a six-month high as U.S. builders started construction on 591,000 units. Last month’s surge helped solidify a year-long upward trend in new-home construction. U.S. housing starts have increased more than 21 percent in the last 12 months, the largest increase since April 2004.  Analysts said the surge in new construction is welcome news for the housing market. Here’s a sampling of what they had to say:

Aaron Smith, senior economist at Moody’s Economy: “We’re in a slow and steady progress phase of the housing recovery. The trend will be upward, but it’s going to be a bumpy path higher.” (Source: Bloomberg)

 Pat Newport, economist with HIS Global Insight: “The housing starts numbers are much more important than just about any other statistic, because when you build a $400,000 home, that $400,000 goes into GDP. So it’s good we’re seeing an improvement in housing starts. (Source: NPR)

Mike Larson, an analyst with Weiss Research: The housing market continues to show signs of stabilization. Indeed, builder optimism, sales, and starts are all flattening out after a plunge that reminds me of the ski slopes at the Vancouver Olympics.” (Source: Wall Street Journal)

Bob Jones, chairman of National Association of Home Builders; “Builders are starting to see the positive impacts of home buyer tax credits and other favorable buying conditions in terms of consumer demand, and are cautiously increasing production to meet that demand.” (Source: NAHB)

David Crowe,  chief economist for National Association of Home Builders: “As our latest home builder surveys have indicated, today’s excellent home buying conditions – including the availability of tax credits for first-time and repeat buyers, very favorable mortgage rates and stabilizing home values – are helping drive potential buyers back to the market. A continuing shortfall in available credit for building projects is still producing a drag on new construction and slowing the progress of recovery in housing and the overall economy.” (Source: NAHB)